Charitable Trust & NGO Compliance

Running a non-profit in India means clearing four separate compliance layers, and missing any one of them puts your tax-exempt status and your donors' deductions at risk.

1. Getting registered

A trust starts with a Trust Deed — drafted, printed on non-judicial stamp paper, and registered with the local Sub-Registrar. From there it needs its own PAN and TAN, same as any legal entity. The part that actually matters to your funding, though, is Sections 12A and 80G: 12A protects the trust's own income from tax as long as it's applied to charitable objects; 80G is what lets your donors claim a deduction on what they give you. Both now run on provisional registration that has to be renewed every five years — a deadline that's easy to lose track of once the initial registration excitement wears off.

If you're choosing a structure from scratch, the decision isn't just paperwork. A Trust is quick to register and has a low compliance burden, but carries less credibility with large CSR donors. A Society (Societies Registration Act, 1860, minimum seven members) suits member-driven, democratic organisations like educational or cultural bodies. A Section 8 Company carries the most institutional credibility for national-level fundraising but comes with the heaviest compliance load. Which one fits depends on your funding plans, not just your mission.

2. Keeping the books defensible

Non-profit accounting has its own traps. Donations earmarked for a specific purpose — a building fund, a medical camp — have to be tracked separately from general funds, so you can prove the money went where the donor intended. And the "85% rule" under the Income Tax Act requires you to apply at least 85% of your income to charitable purposes in the same year to keep your exemption; falling short without proper accumulation filings (Form 10) can trigger tax on the shortfall.

3. Statutory audit and ITR

Trusts above the exemption threshold need an audit under Section 12A(1)(b), and the ITR (typically Form ITR-7) has its own due dates and disclosure requirements tied to the 12A/80G registration status.

4. Annual filings that are easy to forget

Form 10BD (statement of donations received) and Form 10AB (registration/renewal applications) both carry hard deadlines that don't get any reminder from the department — miss them and the registration itself is at risk, not just a penalty.

At A Glance

Trust Deed drafting and Sub-Registrar registration
12A and 80G provisional registration and 5-year renewal tracking
Fund-wise bookkeeping (restricted vs. general funds)
Statutory audit and ITR-7 filing
Form 10BD and Form 10AB filing with deadline tracking

Documents typically needed:

Trust Deed / Memorandum of Association (draft or existing)
Details of trustees/members with identity and address proof
Bank account details for the trust
Prior year financials, if already operating
Details of donations received (for Form 10BD)