Income Tax

Eligibility and Documents Required for Section 12AB Renewal in 2025

by TaxAcumen Team

Charitable trusts and non-profit institutions in India enjoy income tax exemptions under the Income Tax Act, provided they are registered under Section 12AB. These registrations were initially granted for a limited period, mostly up to March 31, 2026, which means renewal is now mandatory to continue availing benefits. The Finance Act, 2025 has introduced a 10-year validity for eligible trusts, replacing the earlier 5-year cycle.

Also read here

Section 12AB Registration – Meaning, Importance, and Latest Changes (2025 Update)

Who Needs to Renew Section 12AB Registration?

Every trust or institution registered under Section 12AB must apply for renewal at least six months before the expiry date of the current registration. For registrations expiring on March 31, 2026, the last date to apply is September 30, 2025.

Renewal is not optional; it is a legal requirement under Section 12A(1)(ac)(ii). Failure to renew may lead to cancellation of the registration and loss of tax benefits under Sections 11 and 12.

Eligibility for Renewal with 10-Year Validity

The Finance Act, 2025 has brought a major change in validity. If a trust meets certain conditions, the renewed registration will be valid for 10 years instead of 5. The key eligibility requirement is:

Income Threshold Test:

The trust’s total income, calculated without claiming exemptions under Sections 11 and 12, should not exceed ₹5 crore in each of the two previous years before the year of application.

This means, when applying for renewal in 2025, the income for FY 2023-24 and FY 2024-25 will be checked. If the income exceeds ₹5 crore in any of these two years, the trust will get a 5-year validity instead of 10.

Points to Remember:

  • Total income is not the same as gross receipts.
  • It must be computed as per the Income Tax Act, excluding the benefits under Sections 11 and 12.

Who Cannot Get 10-Year Validity?

  • Trusts with income above ₹5 crore in either of the two preceding years.
  • Provisional registrations under sub-clause (vi) of Section 12A(1)(ac) (they still get 3-year validity).
  • Such trusts can apply again after the provisional period ends, but they will not automatically qualify for the 10-year period.

Documents Required for Section 12AB Renewal

To apply for renewal, trusts must submit an application in Form 10AB through the Income Tax portal. Along with the form, the following documents are generally required:

  1. Trust Deed or Registration Certificate – A copy of the original trust deed or instrument of establishment.
  2. Audited Financial Statements – For the two years immediately preceding the year of application (e.g., FY 2023-24 and FY 2024-25).
  3. Income Computation – Showing total income without exemptions under Sections 11 and 12, proving the ₹5 crore threshold compliance.
  4. PAN of the Trust/Institution – Mandatory for filing.
  5. Details of Trustees/Office Bearers – Names, PAN, and addresses of all key persons.
  6. Activity Report – A brief report of activities carried out during the preceding years.
  7. Registration under Other Laws – Copies of registrations under laws like the Societies Registration Act or Companies Act (if applicable).
  8. Compliance Certificates – Declarations confirming adherence to conditions under Section 12AB.

Practical Tips for Smooth Renewal

  • Apply early: Do not wait for the last date. File at least six months before expiry.
  • Keep accounts updated: Ensure audits for FY 2023-24 and FY 2024-25 are completed well before filing.
  • Attach all required proofs: Missing documents can delay or reject the application.
  • Check income calculations carefully: The ₹5 crore limit applies to total income, not receipts.

Conclusion

Renewal of Section 12AB registration is mandatory for all trusts and institutions to retain their tax exemptions. For those meeting the income threshold of ₹5 crore or less in each of the two preceding years, the Finance Act, 2025 offers a 10-year validity, providing long-term stability. Timely application through Form 10AB, supported by complete and accurate documentation, is crucial to avoid penalties and ensure uninterrupted benefits.