Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
12AB = trust exemption
Protects the trust’s income from tax when applied to its objects.
80G = donor deduction
Lets donors reduce their taxable income, helping the trust raise funds.
Why a trust usually wants both, and how they interact
The two registrations protect different people and are most useful together. 12AB shields the trust’s own income from tax, provided it applies 85% to its objects; 80G lets the people who fund the trust reduce their taxable income, which makes raising money easier. A trust can hold one without the other — 12AB without 80G means the trust is tax-exempt but donors get no deduction; 80G without 12AB is unusual, since 80G approval generally presupposes the trust’s charitable status — but in practice almost every charitable trust applies for both, through the same Form 10A/10AB process, at formation. They also share the time-bound, renewable structure and the genuineness review at renewal, so their compliance calendars line up. The annual donation reporting (Form 10BD and 10BE) sits under the 80G side, while the 85% application requirement and ITR-7 filing sit under the 12AB side. Losing either has different effects — losing 12AB exposes the trust’s income (and can trigger exit tax), while losing 80G removes the donor deduction. Treating the two as a linked pair — obtained together, renewed together, reported on together — is the practical way to run a compliant charitable trust. Confirm the current process for both.