Section 12AB & 80G in 2026: How to Ensure Your Trust Never Pays Income Tax. (Tax Exemption)

Trusts play a vital role in supporting charitable activities and social causes. However, to unlock their full potential, trusts must comply with specific registration rules under the Income Tax Act. Two crucial certifications, 12AB and 80G, serve as the lifeblood for trusts by providing tax exemptions and incentives. This blog explains the latest updates to these registration rules and how StartFilings’ Double-Approval service helps trusts secure both certifications efficiently, maximizing tax benefits for the trust and its donors.

Government building entrance for tax registration, image-prompt 'Eye-level view of government building entrance with tax department sign'

Government office where trust registrations under 12AB and 80G are processed

What Are 12AB and 80G Certifications?

12AB Registration: Tax-Exempt Status for Trusts

Section 12AB registration is mandatory for trusts seeking exemption from income tax on their earnings. Without this registration, a trust’s income is fully taxable, which can significantly reduce the funds available for charitable work. The 12AB certificate confirms that the trust meets all legal requirements and operates for charitable purposes.

80G Certification: Tax Benefits for Donors

Section 80G certification allows donors to claim deductions on donations made to the trust. This certification encourages philanthropy by reducing the donor’s taxable income, making contributions more attractive. Trusts with 80G certification often see increased donations because donors receive a direct tax benefit.

Recent Updates to 12AB and 80G Registration Rules

The Income Tax Department has revised the registration process to improve transparency and compliance. The key changes include:

• Unified Application Process: Trusts now apply for 12AB registration through a centralized online portal.

• Mandatory Filing of Form 10A: After receiving 12AB registration, trusts must file Form 10A immediately to confirm their eligibility.

• Stricter Documentation: Trusts must provide detailed financial statements and activity reports.

• Validity and Renewal: Both 12AB and 80G registrations have fixed validity periods and require timely renewal to maintain benefits.

  
  

These updates aim to ensure only genuine charitable organizations receive tax benefits and to prevent misuse of exemptions.

Why These Certifications Are Like Oxygen for Trusts

Think of 12AB and 80G certifications as oxygen for trusts. Without 12AB, a trust cannot breathe freely because it faces full taxation on its income. Without 80G, the trust struggles to attract donors since contributors do not receive tax relief. Together, these certifications keep the trust financially healthy and able to serve its mission.

• 12AB keeps the trust’s income tax-free, allowing more funds to be directed toward charitable activities.

• 80G motivates donors by offering them tax deductions, increasing the inflow of donations.

  
  

Without these certifications, trusts risk losing both financial stability and donor support.

Challenges in Obtaining 12AB and 80G Certifications

The process to secure these certifications can be complex and time-consuming:

• Multiple Steps: Trusts must apply for 12AB first, then file Form 10A, and finally apply for 80G.

• Documentation Requirements: Detailed financial and operational documents must be prepared and submitted.

• Strict Deadlines: Missing deadlines can lead to rejection or delays.

• Technical Knowledge: Navigating the Income Tax portal and understanding legal requirements can be difficult for trustees without legal or tax expertise.

  
  

These challenges often discourage trusts from applying or cause delays that affect their operations.

How StartFilings’ Double-Approval Service Simplifies the Process

StartFilings offers a Double-Approval service designed to handle both 12AB registration and the immediate filing of Form 10A on the Income Tax portal. This service streamlines the entire certification process, saving time and reducing errors.

What the Double-Approval Service Includes

• End-to-End Support: From preparing the application to submitting documents online.

• Immediate Form 10A Filing: Ensures compliance with the latest rules by filing Form 10A right after 12AB approval.

• Expert Guidance: Tax professionals review all paperwork to meet Income Tax Department standards.

• 80G Application Assistance: After 12AB and Form 10A are approved, StartFilings helps apply for 80G certification.

• Renewal Reminders: Keeps trusts informed about renewal deadlines to maintain certifications.

  
  

Benefits of Using StartFilings

• Faster Approvals: Reduced processing time due to accurate and complete applications.

• Reduced Risk of Rejection: Expert review minimizes errors and missing information.

• Peace of Mind: Trustees can focus on their charitable work while StartFilings manages compliance.

• Cost-Effective: Avoids costly delays and penalties from non-compliance.

  
  
  
  

Practical Example: How a Trust Benefits from Double-Approval

Consider a charitable trust focused on education. Before registration, the trust paid taxes on its income and struggled to attract donors. After using StartFilings’ Double-Approval service:

• The trust secured 12AB registration, making its income tax-exempt.

• Form 10A was filed immediately, ensuring compliance with new rules.

• The trust obtained 80G certification, allowing donors to claim tax deductions.

• Donations increased by 30% within six months due to the tax benefits offered to contributors.

• The trust reinvested saved taxes and increased donations into expanding its scholarship program.

  
  

This example shows how proper certification can transform a trust’s financial health and impact.

Steps to Apply for 12AB and 80G Registration

If you want to apply independently or understand the process better, here are the key steps:

1. Prepare Documents: Trust deed, financial statements, activity reports, PAN card, and identity proofs.

2. Apply for 12AB: Submit application online through the Income Tax Department portal.

3. Wait for Approval: The department reviews and grants 12AB registration.

4. File Form 10A: Immediately after 12AB approval, file Form 10A to confirm eligibility.

5. Apply for 80G: Submit a separate application with required documents.

6. Receive 80G Certificate: After verification, the trust gets 80G certification.

7. Renew on Time: Keep track of expiry dates and renew certifications before they lapse.

   
   

Key Takeaways for Trusts and Donors

• Trusts must secure 12AB registration to avoid paying income tax on donations and other income.

• 80G certification is essential to encourage donations by offering tax deductions to donors.

• Compliance with new rules requires timely filing of Form 10A after 12AB approval.

• Professional help like StartFilings’ Double-Approval service can simplify the process and reduce risks.

• Maintaining certifications ensures continuous tax benefits and donor confidence.

www.startfilings.com

TRUST REGISTRATION | StartFilings | Start a New NGO today !

StartFilings provides expert public limited company registration services. We help you understand the benefits of a PLC, navigate compliance requirements, and streamline the process to raise public capital and boost your business's credibility.