80G Approval: The Organisation’s Side

This page covers the organisation’s position. The donor’s deduction is covered separately in Section 80G: Donations. Section numbers are from the Income tax Act, 1961. This article is for general information and does not constitute tax advice.

Two approvals solving two different problems

12A or 12AB registration exempts the trust’s own income. 80G approval lets the trust’s donors claim a deduction. They are not independent: valid 12A or 12AB registration is a prerequisite, and a trust has to hold it before obtaining or maintaining 80G approval.

The procedural framework is the one set out in 12A/12AB Registration: provisional approval first, conversion to regular through Form 10AB, the same six-months-before-expiry renewal deadline, and the same longer validity option for smaller trusts. Renewal of both can and generally should be combined into a single Form 10AB filing.

Conditions that apply only to 80G

Beyond what 12AB requires, 80G carries its own tests:

• No income from non-exempt sources, business income being the usual example, unless the activity is incidental to the charitable objects, kept in separate books of account, and the income isn’t diverted away from those objects
• The governing document, trust deed, memorandum or bylaws, cannot permit spending income or assets on anything other than charitable purposes
• The organisation cannot work for the benefit of one particular religious community or caste, with a narrow exception for trusts genuinely created for religious purposes broadly rather than for one community exclusively
• Regular, proper books of account throughout

Because these sit on top of the 12AB conditions rather than inside them, the two approvals can move independently. Breaching an 80G-specific condition can cost 80G approval while the underlying exemption registration remains intact.

Form 10BD: the filing donors never see

An approved organisation files Form 10BD by 31 May following the end of the financial year, listing every donation received, with the donor’s name, PAN, address and amount. That filing is what generates the Form 10BE certificates donors rely on for their own deduction. There is no minimum donation size; every donation goes in, not just the large ones.

There are two separate penalties here, and the smaller one gets all the attention. Late filing attracts a fee of ₹200 for every day of delay under Section 234G, which is the figure most people know. Separately, Section 271K provides a penalty ranging from ₹10,000 to ₹1,00,000 for failing to furnish the statement or the certificate. A trust that simply never files is exposed to the second, not merely to an accumulating daily fee.

Worked example: how the two penalties actually compare

A trust misses the 31 May deadline for Form 10BD. Two ways this could go from there:

	Files 90 days late	Never files at all
Section 234G late fee	₹200 × 90 days = ₹18,000	Not applicable, since there is no eventual filing to date the fee against
Section 271K penalty exposure	Generally not triggered, since the statement was eventually furnished	₹10,000 to ₹1,00,000

Filing late, however inconvenient, has a cost that is at least predictable and grows in a straight line. Never filing at all exposes the trust to a discretionary penalty that can run to ₹1,00,000, on top of every donor whose deduction is now unsupported because no 10BE certificate was ever generated for them. The daily fee is the cost of being late; the 271K exposure is the cost of the statement never showing up.

Accuracy matters as much as timeliness. An incorrect PAN causes the donor’s own deduction to be questioned when the department cross-checks their claim against what the organisation reported. The immediate consequence lands on the donor, but the correction request comes straight back to the organisation, and repeatedly getting this wrong is the fastest way to lose donors who have other options.

If approval lapses mid-year

A donor’s deduction depends on the organisation holding valid approval when the donation was made. So a lapse partway through a year splits the year in two, with donations before the lapse still supportable and those after it not, and the organisation cannot generate 10BE certificates for the latter. That is a difficult conversation to have with a donor after the fact, and it is the practical reason renewal deadlines matter beyond the trust’s own tax position.

A material change to the trust’s objects doesn’t carry approval across automatically either; it generally needs to be reported and can require reassessment. And where registration is cancelled outright, the accreted income charge described in 12A/12AB Registration becomes the far larger issue.