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Overview of 80G and 12A Registration
NGOs must apply for 12A & 80G Registration online in India to provide income tax exemption to the bestowers! It also helps NGOs in helping government sponsorship and funds. The expert team at Kanakkupillai are just a phone call behind to help and guide you!
An NGO can receive an exemption from income tax by registering and meeting further requirements; however, donors receive no advantage from this registration. Certain aspects of the Income Tax Act provide tax incentives to "donors." NGOs should take advantage of these provisions to draw in new funders. One of these sections is Section 80G.
12A Registration
NGOs can apply for 12A registration under Section 12A of the Income Tax Act 1961. These organisations are granted tax exemption on income derived from grants, donations, and other unrestricted contributions. All non-governmental organisations that wish to utilise Section 12A's benefits must register.
80G Registration
NGOs obtain an 80G registration to allow their donors to deduct their contributions from their taxes. The goal of 80G registration is to promote increasing donations to NGOs to fund their humanitarian endeavours. This optional registration is available only after completing the 12A registration process.
Eligibility for 12A and 80G Registration
Section 12A allows charitable or religious NGO registration, allowing them to claim tax exemptions on their income from donations. Here are the essential conditions that need to be fulfilled for obtaining Section 12A registration:
- Do not make money from your business.
- It ought to be a society or charitable trust.
- Keeping a daily record of all of your expenses and receipts.
- It does not involve cash or resources for purposes other than beneficent ones.
- Individuals shouldn't have treacherous benefits from the assets.
- They ought not to be working for a specific position or a strict gathering.
- Gifts need not be utilised for business purposes.
Benefits of 80G and 12A Registration
- Obtaining Contributions: Benefactors can guarantee allowances on their available pay for the sum contributed, persuading them to help your objective.
- Increased Number of Donors: Thanks to an 80G certificate, your organisation can connect with a broader range of donors, including individuals, businesses, and institutions.
- Increased Trustworthiness: The 80G and 12A certificates demonstrate the credibility and openness of your organisation.
- Tax Exemption on Income: With a 12A registration, your non-benefit is excluded from paying personal duty on its profit.
- Reserve Portion Adaptability: With Personal duty exclusion, your organisation has greater flexibility in managing and allocating funds for different ventures and exercises.
- Legitimate Shield: Enlistment provides specific legal insurance to your NGO and its members, assisting in resolving disputes and conflicts.
Documents Required for 12A & 80G Registrations
Completing the procedure for online 12A and 80G registration requires eligible NGOs to submit documents establishing their existence as legally registered entities. These documents are necessary for the applications for 12A and 80G registrations to be completed and accepted by the concerned authorities.
Documents for 12A:
- Registration certificate and Memorandum of Association for societies under the Societies Registration Act, 1860, or Section 8 companies.
- Trust deed in case the applicant is a trust.
- PAN card of the NGO.
- Duly filled Form 10G.
- No Objection Certificate (NOC) from the landlord of the registered office premises.
- Utility bills like electricity or water as address proof.
- Details of donors including PAN and addresses.
- Copies of income tax returns, books of accounts, and relevant documents from the past three financial years.
- List of Board of Trustees or Directors.
- Progress reports of the past three years.
- Details and enumeration of welfare projects undertaken.
Documents for 80G:
- PAN card of the NGO.
- Duly filled Form 10A.
- Bank account statement of the last three years.
- Articles of Association and Memorandum of Association for Section 8 companies.
- Self-certified copies of registration certificate, trust deed, or the relevant constitutional documents.
Procedure for 12A and 80G Registration in India
The procedure for registering under Sections 12A and 80G of the Income Tax Act is vital for NGOs and charitable organizations seeking tax exemptions and donor benefits. Below is a step-by-step guide:
Registration under Section 12A
- Filing Form 10A: NGOs must apply online using Form 10A on the Income Tax Portal, directed to the jurisdictional Commissioner of Income Tax (Exemptions).
- Document Verification: Submitted documents, such as the registration certificate, trust deed, and financial statements, are reviewed to ensure the organization qualifies for exemption.
- Issuance of Certificate: If all documents and compliance conditions are satisfactory, the Commissioner issues a 12A registration certificate.
- Opportunity to Clarify: If additional clarification is needed, the organization will be notified. If unsatisfactory, the Commissioner may reject the application after providing an opportunity to be heard.
- Cancellation Clause: The registration may be revoked if activities are found unlawful, non-charitable, or favor a specific group or individual.
Registration under Section 80G
- Filing Application: File for 80G registration with the jurisdictional Income Tax Commissioner using the online Form 10A or Form 10AB (as applicable).
- Document Assessment: Authorities assess documentation such as audited accounts, trust deed, PAN, and utility bills.
- Request for Additional Info: If required, the department may seek further clarification or documents, which must be submitted by the given deadline.
- Approval & Certification: Upon satisfactory verification, the Commissioner will issue the 80G certificate.
Revalidation of 12A & 80G Registrations
As per the Finance Act amendments:
- All registered NGOs must revalidate 12A and 80G registrations using Form 10A between April 1 and June 30, 2021.
- Provisional registrations will be valid for three years. Upon approval, the regular registration is valid for five years.
- Applications for renewal must be filed at least six months before the validity expires.
- The organization must provide a declaration of donations during revalidation or fresh application processes.
Validity of Registration Certificates
- 12A Certificate: Post-revalidation, it is valid for five years.
- 80G Certificate: Renewed certificates are valid for five years and require reapplication before expiration.
Why Choose Kanakkupillai for 12A & 80G Registration?
- Expert Guidance: Our experienced professionals simplify the complexities of NGO and tax exemption registrations.
- Legal Accuracy: Complete assistance in preparing and filing documents without errors.
- End-to-End Support: We handle everything from registration to revalidation and regular compliance.
- Quick Processing: Fast-tracked filing and follow-up with tax authorities for timely certification.
Reach out to our specialists today and begin your hassle-free registration journey for Section 12A and 80G.
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