CBDT Gives Charitable Trusts a Second Chance on 80G Renewal

Richa Sawhney, Partner at Grant Thornton Bharat, described the circular as a second chance for organisations that faced genuine hardship. "Applications rejected solely on account of delayed filing are effectively given a second chance. Their applications will now be reviewed on merits rather than being dismissed merely on technical grounds."

The catch: approval is not automatic. Sawhney cautioned that "the benefit is limited to condonation of delay and does not guarantee automatic renewal of the approval, which will continue to be subject to scrutiny by the tax authorities as per the statutory framework."

For donors, the continuity of 80G approvals means their deductions remain valid for contributions made during the review period. For institutions, the ability to raise funds stays intact while the tax authority reviews their applications. The risk is that a merit review could still reject the application, stripping the institution of its exemption and leaving donors without the deduction. That would hit fundraising hard.

The tax authority has until December 31, 2026 to pass orders on the delayed applications. Institutions should prepare their compliance documentation now for the merit review.