Updated: 2 September 2026
Donation Approval for Charitable Trusts, NGOs, Societies & Section 8 Companies
The familiar expression "Section 80G approval" belongs to the Income-tax Act, 1961. For tax years governed by the Income-tax Act, 2025, donor deduction is dealt with under Section 133, and approval of an eligible charitable institution for that purpose is governed by Section 354.
What is the current equivalent of Section 80G approval?
Under the 2025 Act, Section 133 provides the deduction for qualifying donations. In the case of an eligible charitable fund or institution covered by Section 133(1)(b)(ii), the institution must be a registered non-profit organisation, or another specified eligible entity, and must be approved under Section 354.
This means that organisations should not describe a post-1 April 2026 application simply as an "80G application" without also identifying the current statutory framework. The legacy terminology remains useful for search and historical reference, but the applicable section numbers have changed.
Registration and donor-deduction approval are different
| Purpose | Income-tax Act, 1961 | Income-tax Act, 2025 |
|---|---|---|
| Registration of charitable/non-profit organisation | Section 12AB framework | Section 332 |
| Donor-deduction provision | Section 80G | Section 133 |
| Approval of eligible charitable institution for donor deduction | Section 80G approval framework | Section 354 |
| Application forms | Form 10A / 10AB under applicable rules | Form 10A / 10AB under Income-tax Rules, 2026 |
Registration of the charitable organisation itself does not automatically provide a donor-deduction benefit. The organisation must separately satisfy the conditions for approval under the applicable donor-deduction provision.
Who can seek approval under Section 354?
Section 354 allows a registered non-profit organisation, or another person falling within the relevant specified category, to apply for approval for the purpose of Section 133(1)(b)(ii). A registered non-profit organisation under Section 332 can include, subject to the statutory requirements, a public trust, registered society, Section 8 company and other listed eligible entities.
Main conditions for approval under Section 354
- The organisation must not be expressed to be for the benefit of a particular religious community or caste.
- It must be established in India for a charitable purpose.
- Religious expenditure must not exceed the statutory threshold of 5% of total income for the tax year.
- The governing instrument or rules must not permit transfer of the organisation's assets for a non-charitable purpose.
- Regular accounts of receipts and expenditure must be maintained.
- The prescribed donation statement must be furnished in the prescribed form, manner and time.
- Correction statements must be furnished where required to rectify or update donation information.
- The prescribed donation certificate must be furnished to the donor within the applicable period.
Forms 10A and 10AB under the Income-tax Rules, 2026
The notified Income-tax Rules, 2026 continue the familiar form numbers but connect them to the new statutory provisions. Form 10A is the application for provisional registration or provisional approval. Form 10AB is the application for registration of a non-profit organisation under Section 332 or approval under Section 354.
The applicant should select the correct statutory category in the form. Form 10AB specifically provides for an application under Section 332, Section 354, or both, depending on the case.
Step-by-step procedure
- Confirm the organisation's status. Check the legal form, governing documents, objects and registration status under Section 332 or the applicable transitional provisions.
- Determine the correct approval category. Identify whether activities have commenced, whether provisional approval already exists, and whether an existing approval is approaching expiry.
- Prepare documents. Keep the trust deed/MOA/AOA, registration certificate, PAN, governing-body particulars, accounts, activity records and other prescribed supporting documents ready.
- File the correct electronic form. Use Form 10A for provisional approval where applicable or Form 10AB for the relevant regular approval/registration application.
- Respond to departmental queries. In regular approval cases, the Principal Commissioner or Commissioner may call for documents or information and examine genuineness of activities and compliance with other material laws.
- Preserve the approval order. Record the approval number, commencement year, expiry, conditions and next renewal/reapplication deadline.
Validity of approval under Section 354
| Situation | When to apply | Validity if granted |
|---|---|---|
| Activities have not commenced | At any time during the tax year from which approval is sought | 3 tax years commencing from that tax year |
| Activities have commenced | At any time during the tax year from which approval is sought | 5 tax years commencing from that tax year |
| Provisional approval exists and activities have commenced | Within 6 months of commencement of activities | 5 tax years commencing from the relevant tax year |
| Provisional approval is due to expire and activities have not commenced | At least 6 months before expiry | 5 tax years following the relevant tax year |
| Regular approval is due to expire | At least 6 months before expiry | 5 tax years following the relevant tax year |
Benefit to donors
For the ordinary approved charitable institution category under Section 133(1)(b)(ii), the deduction is generally 50% of the qualifying donation, subject to the qualifying-limit rules in Section 133. This is different from certain specifically listed funds for which the whole donation may qualify.
An approval therefore does not mean that every contribution automatically attracts a 100% deduction. The donor must apply the percentage and qualifying-limit rules applicable to the particular donee category.
Cash and in-kind donations
Monetary donations must satisfy the payment-mode conditions prescribed by the applicable law. As under the legacy Section 80G framework, a donor should avoid large cash contributions when seeking a deduction and should use traceable banking or electronic modes. Donations in kind-such as goods, food, clothing, equipment or medicines-should not automatically be treated as deductible monetary donations.
Donation reporting and donor certificates
The approval framework expressly requires prescribed reporting of donations and furnishing of certificates to donors. Under the legacy 1961 Act system, this was implemented through Form 10BD and Form 10BE. For 2026 onward, institutions should follow the current forms and reporting requirements notified under the Income-tax Rules, 2026 and the e-filing system applicable to the relevant tax year.
Accurate donor identification, donation amount, payment mode and reconciliation with bank and accounting records remain essential because errors can affect the donor's deduction claim.
Section 8 companies, societies and NGOs
A Section 8 company is not automatically entitled to donor-deduction approval merely because it has been incorporated for charitable objects. Likewise, registration of a society under a Societies Registration law does not by itself confer approval. "NGO" is only a broad descriptive expression; eligibility depends on the organisation's actual legal form, registration status, objects, activities and compliance with the applicable Income-tax provisions.
Documents commonly required
- Trust deed, memorandum, articles or other constitutional document.
- Entity registration or incorporation certificate.
- PAN and registered address details.
- Section 332 registration or relevant transitional registration documents.
- Names and details of trustees, directors or governing-body members.
- Activity reports and evidence of charitable activities.
- Financial statements, bank statements and books of account.
- Income-tax returns and audit reports, where applicable.
- Details of existing/provisional approval, if any.
- Details of foreign contribution registration where relevant.
- Donation registers and donor information.
Common mistakes to avoid
- Using only the old "Section 80G" terminology for a 2026-27 or later application without checking Section 354.
- Assuming registration under Section 332 automatically confers donor-deduction approval.
- Selecting the wrong form or application category.
- Allowing provisional or regular approval to expire without timely reapplication.
- Maintaining incomplete donor records.
- Failing to furnish prescribed donation statements or certificates.
- Assuming every approved donation qualifies for a 100% deduction.
- Ignoring the 5% statutory limit relating to religious expenditure.
Official references
The following links are included in the article for legal verification only and are not website menu items.
Conclusion
For tax years governed by the Income-tax Act, 2025, the correct framework is registration under Section 332 and, where donor-deduction approval is sought, approval under Section 354 for the purpose of Section 133(1)(b)(ii). The distinction between organisation registration and donor-deduction approval continues to be fundamental. Charitable trusts, societies, NGOs and Section 8 companies should therefore maintain valid registration, timely approval, proper accounts, accurate donation records and all prescribed post-approval reporting.