# Services by Charitable Entities (Registered u/s 12AB)

## Core Rule

Services provided by an entity registered under Section 12AB of the Income-tax Act by way of charitable activities are EXEMPT from GST.

## What Qualifies as 'Charitable Activities'?

Only the following activities qualify:

1. Public health care

2. Advancement of religion, spirituality or yoga

3. Advancement of educational programmes / skill development for:

Abandoned, orphaned or homeless children
Physically or mentally abused persons
Prisoners
Persons over 65 years residing in rural areas

4. Preservation of environment including watershed, forests and wildlife

## Important Sub-Rules

### Services TO a Charitable Trust

Services provided to a charitable trust are TAXABLE (only services by the trust qualifying as 'charitable activities' are exempt).

### Display of Name / Advertisement on Premises

If a charitable organisation receiving donation/gifts displays the name of the donor or places a name plate on its premises:
If the display amounts to publicity, advertisement or business promotion → TAXABLE
If purely for philanthropy / acknowledgement purpose → EXEMPT

### Training / Coaching in Arts, Culture, Sports

Services by way of training or coaching in:

Recreational activities relating to arts or culture (dance, music, painting, sculpture making, literary activities, theatre), OR
Sports

Provided by an individual OR a charitable entity registered u/s 12AB → EXEMPT

### Old Age Home

Services by an old age home run by Central/State Government or an entity registered u/s 12AA/12AB to its residents (aged 60 years or more):

Consideration up to ₹25,000 per month per member (inclusive of charges for boarding, lodging and maintenance) → EXEMPT

### Import of Services

Import of services by a charitable entity (registered u/s 12AB) for the purpose of providing charitable activities → EXEMPT

Worked example

### Example 1

Example 1: A trust registered u/s 12AB conducts free yoga camps. → Falls under 'advancement of yoga' → EXEMPT.

### Example 2

Example 2: A 12AB-registered trust receives ₹5 lakh donation from XYZ Ltd. and places XYZ Ltd.'s logo on its building as advertisement. → Display amounts to business promotion → TAXABLE.

### Example 3

Example 3: Mr. A, an individual, gives Bharatnatyam dance coaching to children. → Coaching in arts by an individual → EXEMPT.

### Example 4

Example 4: An old age home run by a 12AB trust charges ₹30,000 per month per resident (aged 65). → Exceeds ₹25,000 limit → Entire amount TAXABLE (not just excess).

⚠️ Common exam mistakes

Assuming all services BY a charitable trust are exempt — only those qualifying as 'charitable activities' are exempt.
Forgetting that the entity must be registered u/s 12AB (not just any NGO).
Treating donor name displays as always exempt — if it amounts to advertisement, it is taxable.
Forgetting that for old age homes, the ₹25,000 per month per member is the threshold and the resident must be ≥60 years.
Mixing up training in arts/sports — coaching must be by an individual OR a 12AB-registered charitable entity to be exempt.

Bare-Act text Entry 1 · Notification No. 12/2017-Central Tax (Rate) · click to expand

Services by an entity registered under Section 12AB of the Income-tax Act, 1961 by way of charitable activities.

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Services by Charitable Entities Registered u/s 12AB

Worked example

⚠️ Common exam mistakes