Event Summary
On 28 November 2025, the Income Tax Department issued an announcement stating that all charitable trusts and societies must register with the department to avail tax exemptions and issue 80G certificates to donors. This directive was reiterated by B. Balakrishna, Commissioner of Income-Tax (Exemptions), who emphasized that charitable organisations must maintain proper books of accounts, have their accounts audited, file annual documents such as audit reports and statements of income application, and ensure that their funds are invested only in prescribed modes. Charitable trusts and NGOs have long been required to register under provisions such as Section 12AB and 80G to enjoy tax-exempt status and provide tax benefits to donors. Recent reforms through the Income Tax Act of 2025, taking effect in April 2026, aim to simplify compliance, but the overall regulatory direction has been toward increased documentation, disclosure, and accountability with grave practical implications for small, rural, and volunteer-run organisations, who fear to lose eligibility for income-tax exemptions given their limited capacities of complying with the regulations.
The new announcement reinforces these trends, emphasizing transparency and the need for trusts to clearly define their activities, maintain proper financial practices, and align with the expectations of the tax department. It has been interpreted by civil society as a signal that stricter scrutiny lies ahead of the Income Tax Act, 2025 coming into force. The department also announced upcoming outreach programmes for chartered accountants across Telangana and Andhra Pradesh to help organisations prepare for compliance under the new Income Tax Act, 2025. However, the lack of direct, CSO-focused support means that organisations with fewer resources may continue to struggle, including under the new regulations.