The Approval Letter Every NGO Waits For: Form 10AC

Running a charitable or religious institution is not just about helping people — it’s also about navigating compliance, paperwork, and rules that ensure transparency. One of the most important parts of this compliance journey is obtaining registration under the Income Tax Act. Form 10AC plays a central role here.

It is the order issued by the Income Tax Department granting registration or approval to trusts, NGOs, and institutions seeking tax exemptions. Without it, organisations cannot claim income-tax benefits on their income, nor can their donors claim deductions under Section 80G. In simple terms, it is the document that gives a non-profit its tax-privileged identity.

What Exactly Is Form 10AC?

Form 10AC is the official approval order issued when a trust or institution applies for registration under Sections 12AB, 10(23C), or 80G of the Income-tax Act.

This makes the form crucial for:

• Charitable or religious trusts
• Educational institutions"
• NGOs and non-profit bodies
• Hospitals & medical institutions

Why it matters:

• It acts as proof of registration
• It enables trusts to receive donations with tax benefits for donors"
• It allows the organisation to enjoy income tax exemptions
• It is mandatory for ensuring credibility and transparency

Many organisations frame it and hang it on their office wall — that’s how important it is.

Also Read: Switching Between Old and New Tax Regime (Form 10-IEA)

Why Registration Through Form 10AC Is Needed

Imagine running a small NGO that provides food to underprivileged children. People want to support you, but they often ask:
“Will I get an 80G deduction if I donate?”
Without Form 10AC, the answer is no.

Here’s why the registration is essential:

1. Tax exemption for the organisation

• A registered trust does not pay income tax on eligible income.

2. Donor benefits under Section 80G

• Donors can claim deductions — which increases trust and encourages more contributions.

3. Legal recognition

• The registration is a government-certified stamp of authenticity.

4. Compliance with updated rules

• After the 2020 changes, old registrations became invalid unless revalidated using Form 10A, which then leads to Form 10AC.

How Form 10AC Is Issued

The process is a mix of digital submissions & departmental review. An organisation must file Form 10A (application for registration). Once reviewed and approved, the Income Tax Department issues Form 10AC, detailing:

• PAN of the organisation
• Section under which approval is granted"
• Date of approval
• Registration number
• Terms and validity period

The approval may come with conditions — and they should be followed strictly to avoid cancellation.

Also Read: The One Form That Saves NRIs From Double Tax: Form 10H

Key Features of Form 10AC

1. Proof of Registration
   • It acts as a certificate that the trust is recognised for exemptions.
2. Enables Tax Benefits
   • Form 10AC allows organisations to legally offer Section 80G benefits to donors."
3. Mandatory for Compliance
   • Without this approval, income of the trust may become taxable.
4. Validity Period
   • Usually granted for 5 years (for regular approvals) or provisional approval for 3 years.
5. Applies to Multiple Sections
   • Depending on the nature of the institution, Form 10AC may grant registration under:
     • Section 12AB (charitable registration)
     • Section 10(23C) (educational/medical institutions)
     • Section 80G (donor-based deductions)

A Small Case Study for Real-Life Clarity

A friend once ran a small charitable library for school kids in a rural area. Donations began increasing, but the moment she applied for CSR funds from a corporate donor, they asked for one thing:
“Send us your 10AC order.”

She had heard about 80G certificates but didn’t realise that Form 10AC is actually the official approval. Once issued, it opened the door to corporate donors, grant makers, and even government-supported schemes.

That one document changed the scale of her charity.

Also Read: Form 16: Everything You Need to Know About Your Salary TDS Certificate

What Happens If You Don’t Have Form 10AC?

Without this approval:

• Donations cannot offer tax benefits
• Accounts may be scrutinised more strictly
• Income may become taxable
• CSR funds usually get denied
• Renewal of registration becomes difficult

This is why filing Form 10A on time & securing Form 10AC is essential for long-term sustainability."

Common Mistakes Institutions Make

Here are the issues many trusts face:

• Not renewing registrations within the deadline
• Incorrect document uploads"
• Mismatch between PAN & trust deed details
• Not understanding which section they are applying under

A little professional guidance can prevent a lot of stress later.

Also Read: Form 15H: The Declaration That Saves Senior Citizens from TDS

Conclusion

Form 10AC may look like a simple document, but it plays a massive role in the functioning and credibility of India’s non-profit sector. It gives charitable institutions the official recognition they need & assures donors their contributions are meaningful—and tax beneficial.

If your trust or NGO is planning to apply for registration, or you’re unsure about renewal, the right guidance can make the process smoother and stress-free. For expert help with registrations, compliance, and tax exemptions, visit Callmyca.com — where clarity meets compassion.