Section 80G- 12A Registration
Choose 12A and 80G registration to ensure your NGO and donors are tax exempt. .
SECTION 80G - 12A REGISTRATION
About 12A Registration
12A Registration is a process through which non-profit organizations, including trusts, societies, and Section 8 companies in India, can obtain tax exemption status. Once registered under Section 12A of the Income Tax Act, 1961, the income of these organizations is exempt from tax, provided it is used for charitable or religious purposes.
3. Documents Required for 12A Registration:
- A copy of the trust deed, society registration certificate, or incorporation certificate for a Section 8 company.
- PAN card of the organization.
- Bank account statements of the entity.
- Details of activities conducted by the organization since its inception.
- A list of trustees or governing body members.
- Proof of address and other related documents
What Is the Procedure for 12A Registration?
Application to be made in Form 10A
The application must be completed as per the instructions of the Income Tax Officer
After receipt of the form and verification information, the Governor shall confirm the legality of the activities of the organization.< He also has the right to request any additional information or information as he deems necessary. Additional information or information
The Governor’s Office has issued a written statement as a necessary notification to register under 12A
In case of refusal by the Governor, the applicant will be brought to justice. Opportunity to hear complaints regarding the application.
Benefits of Section 80G-12A Registration
1. Tax Exemptions for Donors (Section 80G):
- Under Section 80G, donors who contribute to an NGO registered under this section can claim tax deductions on their donations. This encourages more individuals and corporate entities to donate, as they can deduct 50% or 100% of the donation amount from their taxable income.
- The exemption limit for a donor is 10% of gross total income for the financial year.
2. Income Tax Exemption for the NGO (Section 12A):
- Section 12A registration provides income tax exemption to the NGO itself. The income generated by the charitable activities of the organization is exempt from tax, which significantly reduces the financial burden on the NGO.
- Without 12A registration, an NGO would have to pay income tax at the usual rates applicable to any business.
3. Eligibility for Government Grants and Funding:
- Registered NGOs under 80G and 12A become eligible to apply for government grants and funding programs. These registrations build credibility, making it easier to collaborate with both government bodies and large corporate donors.
4. Improved Fundraising Capabilities:
- 80G registration attracts more donors since contributions are eligible for tax deductions, making NGOs more competitive in raising funds.
- 12A registration ensures that all funds received for charitable purposes remain tax-exempt, allowing NGOs to retain more resources for their projects.
5. No Tax on Accumulated Income:
- Under 12A, NGOs can accumulate income for specific projects and purposes without paying tax, provided the accumulated funds are used for approved charitable purposes. This helps NGOs plan and execute long-term projects more effectively.
6. One-Time Registration:
- Both 80G and 12A registrations are typically a one-time process, though periodic renewals may be required. Once registered, NGOs can continuously benefit from the tax exemptions and donor incentives provided under these sections.
7. Attracting CSR Funding:
- Many corporate bodies in India prefer donating to 80G and 12A-registered NGOs to fulfill their Corporate Social Responsibility (CSR) obligations, as these donations are tax-deductible
What Is an 80G Certificate?
80G certificates are issued to non-governmental organisations (NGOs) such as Section 8 companies or trusts. It supports financial aid to some non-profit organisations. Also, when a person donates to this charity, he/she can get tax exemption by deducting it from his/her entire income. Donors need to submit a donation receipt to avail the exemption. This receipt should include the document, date of donation and information regarding the organisation’s PAN.
Procedure for 80G Registration
Submit the required documents and application form for 80G certificate to the Revenue (Exemption) Commissioner of the region to which the manager belongs
After submitting the form and required documents, the state revenue will conduct an on-site inspection. 80G registration
However, if it is seen that they are insufficient or do not have certain details, the income tax officer will ask for more information or create a certificate
After checking the documents of the organization, the manager issues an 80G certificate to the organization. and NGO.
Documents Required for 80G Registration
- PAN Card of the NGO.
- Registration certificate of the organization.
- Copies of the NGO’s audited financial statements for the last three years.
- Copy of Trust Deed or Memorandum of Association (MoA).
- Details of charitable activities carried out by the NGO
FAQ's on Section 80G- 12A Registration
Section 80G registration allows an NGO or charitable institution to offer tax deductions to donors for donations made to the organization. Donors can claim tax relief of 50% or 100% on their donation, depending on the type of donation and the organization’s status.
Section 12A provides an NGO or charitable trust with income tax exemption. It allows the organization to be exempt from paying income tax on surplus funds generated through charitable activities, making the income tax-free. Without 12A registration, an NGO's income would be taxed just like any other organization.
Section 80G registration is crucial because it makes the NGO eligible to receive tax-exempt donations, encouraging both individuals and corporates to donate to the cause. It improves fundraising capacity, as donors can claim tax deductions under Section 80G of the Income Tax Act.
12A registration allows NGOs to enjoy tax exemption on their income, ensuring that any funds received for charitable purposes are not taxed. This helps the organization allocate more resources to its projects rather than paying taxes on income.
Yes, applying for both registrations is advisable. 12A registration ensures that the organization itself is tax-exempt, while 80G registration allows donors to benefit from tax deductions, improving the NGO’s credibility and appeal to potential donors.
Yes, a newly established NGO can apply for both 80G and 12A registration. However, the NGO must have been conducting charitable activities for a reasonable period and have the necessary documents like financial statements, MoA (Memorandum of Association), or Trust Deed to prove its legitimacy.
Key documents include:
- PAN card of the organization.
- Registration certificate of the NGO or trust.
- MoA or Trust Deed.
- Audited financial statements for the past three years.
- Details of activities and donors list for 80G registration.
- Bank account details and list of trustees or members.
Key documents include:
- Registration certificate of the NGO or trust.
- MoA or Trust Deed.
- Audited financial statements for the past three years.
- Details of activities and donors list for 80G registration.
- Bank account details and list of trustees or members.
No, 80G registration is not permanent. It is typically granted for a specific period (usually 5 years) after which the organization must renew the registration. However, 12A registration is a one-time process and does not require renewal.
Yes, an NGO can lose its registration if it fails to comply with the regulations set by the Income Tax Department. This includes engaging in non-charitable activities, misusing funds, or not maintaining proper financial records.
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