About 80G and 12A Registrations
NGOS particularly depend on donations to function their activities.In order to claim Tax Exemptions, NGOs have to register under Section 80G and Section 12A of the Income Tax Act.The process is difficult and complicatedand time consuming.Hence it can be problematic for non-professionals to get the regsitration.At R2 Experts, we have a team of professionals.
BENEFITS OF 12A AND 80G REGISTRATION
Society
- More Funds to Function -The tax exemption on NGO income, more capital will now be available for charitable purposes as it will attract more donors.
- New Sources of Funds - Funds and grants are permitted after getting 12AB & 80G registrationfrom Recognized agencies, government, and international
- Broadens the scope of NGO - Given that many donors are attracted to charity because this amount is not included in the tax, this expands the scope of the NGO's mission, as many donations are now available to it.
- FCRA Fundings - NGOs are allowed to accept International funding Only if that NGO is 12AB and 80G registered, with exceptions available under the Foreign Regulation Act, 2010 (FCRA).
- More Exposure - If an NGO registers and receives 12A and 80G registrations, it will gain more operational exposure and status value.
- Validity - Provisional 12AB & 80G is valid for 3 years. This registration must be renewed 6 months before these certificates expire.
WHAT IS 80G CERTIFICATE?
80G Certificate is issued by the Income Tax Department to a non-governmental organization (NGO) such as a charitable trust, or a Section 8 Company.The 80G Certificate is issued to NGO to encourage the donors to donate funds and avail 50% Tax exemption under Income Tax on donations,as they become eligible to deduct such amount from their Gross Total Income.Donor need to provide proof of the donation to get this certificate. This certificate is valid for 5 years.. Such a receipt must contain the donor’s name, date of donation, and PAN of the organization.
As per Section 20 of the Society Act, 1860, a society can be registered for the given purposes:
- Promotion of fine arts.
- Distribution of political education.
- Grant of charitable assistance.
- Creation of military orphan funds.
- Promotion of science & literature.
- Foundation or maintenance of reading rooms or libraries.
- Foundation or maintenance of galleries or public museums.
- Collections of natural history.
- Diffusion or Promotion or instruction of purposeful knowledge.
- Collections of philosophical & mechanical inventions, designs, or instruments.
Registration of NGO Under Sec 80G:
As per Section 80G of the Income Tax Act, if an NGO gets an 80G certification then it’s donors will be allowed to reduce the amount of donation made from its total Income
How to Register NGO Under Section 80G
Any non-governmental organization wishing to register under Section 80G must be duly registered and must act primarily for charitable purposes.
- Step 1: An application has to be filed in Form 10A with the Commissioner of Income Tax – Exemption.
- Step 2: Submit required documents
- Step 3: After Submission, documents will be reviewed by Commisioner of Income Tax. If required, CIT may ask for additional documents and same must be produced within the timeframe to avoid rejection
Registration of NGO Under 12A:
Section 12 A of the Income Tax Act, 1961, is a onetime tax exemption provided to trusts, NGOs and Section 8 Companies. Organizations holding a registration under section 12A are exempted from paying taxes on their surplus income.NGOs are organizations involved in charitable and non-profit activities. However, they do earn income and they are required to pay tax as per normal rates if not registered under section 12A, Income Tax Act.
How to Register NGO Under Section 12A
Before registration under 12A and 80G, an NGO has to first register with NGO Darpan, a register maintained by the Government of India, and then be registered under the Income Tax Act 1961. A NGO can apply for 12A by following the below steps
- Step 1: An application has to be filed in Form 10A with the Commissioner of Income Tax - Exemption
- Step 2: Submit required documents
- Step 3: After submitting the documents, it will be reviewed by Commisioner of Income Tax, and might ask for additonal documents if required
- Step 4: If all documents are found satisfactory, registration will be completed after it, else it will get rejected
Do You Have Any Questions?
* All donations are not qualified for tax reductions. Tax reductions can be guaranteed uniquely on explicit gifts for example those made to recommended assets and establishments.
* For asserting reasoning under Section 80G, a receipt gave by the beneficiary trust,called as donee, is an unquestionable requirement. The receipt must contain the name, address and PAN of the Trust, the name of the benefactor, the sum gave.
* Documental evidence of the creation of the Trust or NGO – Trust Deed of a Trust; Registration Certificate and Memorandum of Association of a society; section 8 companies to submit a certificate of incorporation and copies of MoA and AoA of the company.
* Three-year bank account statement of the Trust.
* PAN card of the organization.
- NGO Registration
- Trust Registration
- Society Registration
- Section-8 Company Registration
- NGO Darpan Registration
- Co-Operative Society Registration
- 12A and 80G Registration
- 12AA Registration
- 12AB Registration
- FCRA Registration
- Privated Limited Company
- OPC (One Person Company)
- Partnership Firm
- Limited Liablity Partnership
- Startup India Registration
- MSME Registration
- ISO Certification
