10-Year Trust Registration for Small Trusts (s.332(5), ITA 2025; ex-s.12AB)
Small trusts with income up to Rs.5 crore keep a 10-year registration — under s.12AB for pre-April-2026 grants, s.332(5) of ITA 2025 after. Donor-deduction approval stays on its 5-year cycle (s.80G, then s.354).
CA Harun Raaj
Chartered Accountant · Harun Raaj & Associates
Legal basis: Section 12AB(1), Income-tax Act, 1961, as amended by Finance Act 2025 (in force 1 April 2025) — for registrations granted before 1 April 2026; from Tax Year 2026-27 the 10-year rule sits in Section 332(5), renewals in Section 332(3), and donor-deduction approvals in Section 354(2) of the Income-tax Act, 2025. Last updated: October 2026.
Finance Act 2025 changes how charitable trusts and exempt institutions must approach Section 12AB registration validity. Qualifying small trusts now get a ten-year registration instead of five — but the 80G clock is untouched, and renewal timing still decides whether exemption survives. Both points affect whether Section 11 and 12 exemption survives an assessment.
The Finance Act 2025 Change: 10-Year Validity
Before Finance Act 2025, every regular Section 12AB registration ran for five years, regardless of the trust's size or income. Finance Act 2025 inserted a proviso in Section 12AB(1) — in force from 1 April 2025 — so that qualifying entities now get a ten-year registration instead.
A trust or institution qualifies for the ten-year period if its total income — computed without giving effect to Sections 11 and 12 — does not exceed ₹5 crore in each of the two previous years preceding the previous year in which the application (under sub-clauses (i) to (v) of Section 12A(1)(ac)) is made. In practice this covers most small and medium charitable trusts: educational institutions, temples, small hospitals, and local charitable societies with modest receipts.
Key point: A trust with total income under ₹5 crore in each of the two preceding years gets a 10-year Section 12AB registration under Finance Act 2025; above that threshold, the registration remains valid for five years.
Section 80G Is Unaffected — Still 5 Years
This distinction trips up trusts every renewal cycle. Section 80G approval is not touched by the Finance Act 2025 amendment. Both fresh and renewal approvals under Section 80G(5) are granted "for a period of five years" — no matter how large or small the trust is. From Tax Year 2026-27 the equivalent donor-deduction approval is Section 354, whose renewal table likewise grants five tax years (Section 354(2), Sl. No. 5). A trust that qualifies for the ten-year Section 12AB extension must still track and renew its 80G approval separately, on its own five-year clock. Missing an 80G renewal does not affect the trust's own tax exemption directly — Section 80G is a deduction in the donor's hands — but it does mean donors lose their deduction, a real fundraising risk that trustees often discover only when a donor asks why the certificate did not arrive.
5-Year vs 10-Year Validity at a Glance
How to Apply for Renewal
Which section you apply under depends on when you apply. For applications made before 1 April 2026, renewal is applied for under Section 12A(1)(ac)(ii) of the 1961 Act, at least six months before the registration's expiry date. For applications made on or after 1 April 2026, renewal falls under Section 332(3) of the ITA 2025 (Table Sl. No. 5 — also at least six months before expiry), in the form prescribed by the Income-tax Rules 2026. Donor-deduction renewals from that date go under Section 354(2) (Table Sl. No. 5 — six months before expiry, five tax years). File in the current prescribed form on the income tax e-filing portal — always use the current format rather than an older saved copy, and keep the acknowledgement for the assessment file.
Why Registration Status Decides Exemption
Registration status is a key compliance fact for a charitable trust's tax position. A trust that qualifies for the ten-year Section 12AB window still has to apply for renewal on time, still has to renew Section 80G separately every five years, and still has to keep its donation reporting reconciled before filing ITR-7. Any gap in that chain is exactly what an assessing officer examines first.
I'm CA Harun Raaj, Visakhapatnam. If your trust's registration or donor-approval renewal is due, or you are unsure which Act's section governs your application date, reach out and we will review your filings before the assessing officer does.
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