Charitable trust / Section 8 registration

Charitable / religious trusts and Section 8 companies must register under §12A (renumbered §12AB from 2021) to claim income-tax exemption on the income applied for charitable purposes.

Key points

• Without §12AB registration, a trust pays tax at the maximum marginal rate (around 30%) on its surplus.
• With registration, the income applied for the trust's charitable objects is EXEMPT under §11.
• The key conditions are that 85% of income must be applied during the FY (or accumulated under §11(2) for up to 5 years with Form 10 filing);
• the trust property must be wholly devoted to a charitable purpose;
• and the books must be audited if income before exemption exceeds ₹2.5 L (Form 10B or 10BB).
• The registration process uses Form 10A for a new application and Form 10AB for renewal.
• Registration is valid for 5 years and renewal through Form 10AB is mandatory.
• Every existing trust was required to re-register under §12AB by 30-Jun-2021 in a mass migration exercise (pending cases have been extended).
• Foreign-source donations need a separate FCRA registration.

Reference: §12A / §12AB, ITA 1961 — under ITA 2025 (FY 26-27 onwards), this is §332