35AC Registration in India was a special approval granted to eligible NGOs and institutions to allow donors to claim 100% tax deduction on donations for notified social and economic welfare projects. Although new approvals under Section 35AC are discontinued, many people still search for clarity on its meaning, process, and current status. In this Saving Mantra guide, we explain what 35AC registration was, how it worked, and what alternatives NGOs should consider today.
What is 35AC Registration?
Section 35AC of the Income Tax Act, 1961 allowed donors to claim 100% deduction on donations made to projects approved by the National Committee for Promotion of Social and Economic Welfare. The benefit applied only to approved projects, not merely to registered NGOs.
⚠️ Important Update:
The Government of India discontinued new approvals under Section 35AC from FY 2017–18 onwards. No new projects are approved under 35AC now.
Purpose of 35AC Registration
The objective of Section 35AC was to:
- Promote social and economic welfare activities
- Encourage corporate and individual donations
- Support government-recognized development projects
- Ensure transparent and monitored use of donated funds
Who Was Eligible for 35AC Approval?
Earlier, the following entities could apply:
- Registered charitable trusts
- Societies
- Section 8 Companies
- NGOs engaged in notified welfare activities
Approval was project-specific, not organization-wide.
Benefits of 35AC Registration (Earlier)
- 100% tax deduction for donors
- Increased credibility for NGOs
- Higher corporate participation in social projects
- Government recognition of welfare activities
Step-by-Step Process of 35AC Registration (Earlier Process)
Step 1: NGO Registration
The organization had to be registered as a Trust, Society, or Section 8 Company.
Step 2: Prepare Detailed Project Proposal
A comprehensive project report was required, including:
- Project objectives
- Target beneficiaries
- Implementation plan
- Budget and funding requirement
Step 3: Apply to National Committee
The application was submitted to the National Committee under the Income Tax Department.
Step 4: Scrutiny and Evaluation
The committee evaluated the project’s social impact, feasibility, and compliance.
Step 5: Grant of 35AC Approval
Upon approval, the project was notified, and donors could claim 100% deduction.
Documents Required for 35AC Registration (Earlier)
- NGO registration certificate
- Trust Deed / MOA & AOA
- PAN Card
- Audited financial statements
- Detailed project report
- Activity and impact reports
Current Status of 35AC Registration in India
- ❌ New 35AC approvals are not available
- ❌ Donors cannot claim deduction under new 35AC projects
- ✅ Existing approvals (granted earlier) were valid only till their notified period
Alternatives to 35AC Registration for NGOs
Since 35AC is discontinued, NGOs should consider:
- 12A / 12AB Registration – Income tax exemption for NGO
- 80G Registration – Tax deduction for donors
- CSR funding under Companies Act
- Government grants and schemes
Why Choose Saving Mantra for NGO Tax Registrations?
- Expert guidance on current tax laws
- 12A / 12AB and 80G registration support
- Clear advice on discontinued provisions like 35AC
- Transparent and affordable pricing
- End-to-end NGO compliance solutions
Conclusion
35AC Registration in India was a powerful tax incentive for donors and NGOs, but it is no longer available for new registrations. Understanding its history helps NGOs and donors make informed decisions and move towards current and valid alternatives like 12A and 80G registration. With Saving Mantra, NGOs receive accurate, up-to-date, and compliant guidance for sustainable growth.
Disclaimer
This blog is for informational purposes only and does not constitute legal or tax advice. Section 35AC approvals have been discontinued for new projects, and tax laws are subject to change. Readers are advised to consult qualified professionals before making any decisions related to NGO taxation or donor benefits.