Renewal of Section 12A Registration under the Income Tax Act is necessary because recent amendments have removed its earlier perpetual validity. Since April 1, 2021, registrations granted under Section 12A (previously perpetual) are now valid for a period of five years only, after which organizations must apply for renewal to continue enjoying tax exemption benefits.
Key points regarding the necessity of 12A renewal:
- Validity and Renewal Timeline: Registration under Section 12A is now valid for five years from the Assessment Year in which the registration is granted or renewed. Organizations must apply for renewal at least six months before the expiry of their current registration period to maintain uninterrupted tax exemption status.
- Legal Basis: The change stems from the Finance Act, 2020, which replaced Section 12AA with Section 12AB, introducing a mandatory renewal mechanism to ensure that organizations continuously comply with the charitable purpose and conditions linked to tax exemption.
- Renewal Process: Renewal applications are submitted online through Form No. 10AB. The competent authority (Principal Commissioner or Commissioner of Income Tax) processes the renewal and issues an order in Form No. 10AD within prescribed time limits. Failure to renew registration will result in the previous registration becoming inoperative, leading to loss of exemption benefits.
- Documentation and Compliance: Organizations need to provide relevant documents like PAN, registration certificate, trust deed, audited financials, activity reports, and details of trustees while applying for renewal. This ensures transparency and confirms the organization’s ongoing eligibility for tax exemption under Section 12A.
- Importance: Renewal maintains the organization’s eligibility to claim income tax exemption on its charitable activities and enables eligibility for government grants and donor confidence.
In summary, renewal under Section 12A has become a statutory necessity every five years for charitable trusts, societies, and NGOs to sustain their tax-exempt status under the Income Tax Act. Failure to renew can lead to loss of exemption and related benefits. Therefore, timely renewal is crucial for ongoing compliance and operational continuity.
12A Renewal Due Date Reminder for Organizations Granted 5-Year Exemption in 2021
In this brief background, Organizations that received 12A registration or revalidation for a 5-year period starting from April 1, 2021, are approaching the end of their current exemption cycle. As per the latest regulations:
- Validity Period: All 12A registrations granted or revalidated from April 1, 2021, are valid for 5 years.
- Renewal Requirement: Renewal of 12A registration is mandatory for continued income tax exemption.
- Application Window: Renewal application must be submitted at least 6 months before the expiry of the 5-year period.
Key Dates and Deadlines
| Event | Validity/ Period | Form | Due date for renewal application |
| 12A registration/revalidation from April 1, 2021 | 5 Years | 10A/10AB | At least 6 months before expiry (i.e. by Sept 30, 2025, for those granted in April 2021) |
- If your initial 5-year exemption was granted any time between April 1, 2021, and March 31, 2022, the renewal application is due 6 months before expiry: That is, for those whose certificate expires March 31, 2026, the renewal must be applied for by September 30, 2025.
- Application Form: Renewal is to be submitted in Form 10AB.
Challenges for 12A renewal
Non-availability of Updated ITR-7 Form
The Income Tax Department has not yet released the new ITR-7 form for AY 2025-26. This creates uncertainty on how to comply with renewal formalities accurately, as the latest form may include new disclosures or formats aligned with recent amendments in charitable trust regulations. Without the updated form, filing could be delayed or result in procedural errors.
Time Pressure Due to Renewal Timeline
Since organizations registered or revalidated in FY 2021-22 have to apply for 12A renewal at least six months before expiry (i.e., by September 30, 2025), many NGOs are under strict deadlines. Pressure builds as FY 2024-25 audited financials (usually due by September or October 2025) must also be ready to substantiate income and activities claimed in renewal applications.
The deadline for filing the 12A renewal application is fixed at 30th September 2025, which is six months before the expiry of registration on 31st March 2026. However, the statutory due date for filing audited financial statements and the income tax returns (including ITR-7 for trusts/NGOs) for FY 2024-25 generally falls later, often in October or November 2025, or even beyond if extensions are granted.
Mandatory Submission of Audited Financial Statements
Renewal under Section 12AB requires submission of audited financial statements for the relevant financial year to prove genuine charitable activity and compliance with conditions of exemption. Obtaining audited accounts for FY 2024-25 on time is challenging, especially when audits are delayed or auditors face time constraints.
The relevant screen shot of Form 10AB directing to provide income details for the financial year 2024-25
Increased Compliance Burden amid Ongoing Amendments
Recent amendments in the Income Tax Act and the Finance Bill 2025 propose extending registration validity for smaller trusts from 5 to 10 years based on income criteria and easing incomplete application rejection. However, the absence of clarity or implementation lag increases compliance complexity, often requiring trusts to prepare for renewal under older 5-year rules until new processes stabilize.
Risk of Rejection and Litigation
Delays in filing renewal or incomplete submission (including audit reports and statutory documents) can lead to rejection of the renewal application by the Commissioner (Exemption). This can result in cancellation of 12A registration, loss of exemption benefits, and consequent tax liabilities for the trust, potentially triggering litigation
Summary table of key challenges
| Challenge | Impact |
| Non-release of updated ITR-7 | Uncertainty and delay in filing renewal |
| Tight renewal deadline (Sept 30, 2025) | Time pressure to finalize audits and documents |
| Mandatory audited financials | Difficulty in timely audit completion |
| Compliance amid changing rules | Confusion due to amendments and unclear applicability |
| Risk of rejection and tax penalties | Financial and reputational risk |
Therefore, organizations face a convergence of procedural uncertainty, strict timelines, and compliance burdens this renewal cycle that necessitates early coordination with auditors and tax professionals, vigilant monitoring for form releases, and prompt submission of complete documents to avoid adverse consequences.
Way forward
To address the challenge that the due date for 12A renewal application (30th September 2025) precedes the final submission dates for audited financial statements and income tax returns for FY 2024-25, organizations and stakeholders can consider making formal representations requesting relaxation or extension for submitting audited financials as part of the renewal process.
The representations should firmly request that the authorities adjust the requirement to submit final audited financial statements for FY 2024-25 by 30th September 2025 in 12A renewal applications since this is practically difficult and the filing window legally extends beyond that date. Allowing phased or extended submissions would ensure smooth compliance and avoid inadvertent loss of exemption status for non-profit organizations.
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( the views expressed in this article are strictly personal and author of this article can be reached at caprudhvigst@gmail.com)
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