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80G and 12A Registration

NGOs must apply for 12A & 80G Certificate to provide income tax exemption to the donors! It also helps NGOs in availing government funding.

  • Drafting of application for 12A & 80G exemption certificate
  • Submission of application with the Income Tax authority
  • End to end coordination with the authority
  • Approval from the authority
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Overview of 80G and 12A Registrations

80G and 12A registrations apply only to NGOs and Charitable Organizations if they fulfil the following conditions:

  • They must not have any income generated from a business
  • They should either be a charitable trust or a registered society
  • Also, such organizations should not be using their assets or income for any other purpose other than making charity
  • Furthermore, they must maintain a regular book of accounts in favor of their receipts and expenses.
  • The trustees or any other body governing the organization should not be involved in deriving any undue benefits from these funds
  • They should not be working for the benefit of any particular caste or religion
  • Also, in the case of business-related income, the organization should maintain a separate book of accounts. However, the donations received by the NGO must not be used for such businesses.

An NGO must apply for 12A and 80G Registration immediately after its incorporation.

What is an 80G Certificate?

An 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 granted to encourage the donors to donate funds into such non- profit organizations. Furthermore, the donor gets a tax exemption of 50% when they make donations to such organization, as they become eligible to deduct such amount from their Gross Total Income. Additionally, in order to avail the exemption, the donor needs to attach the stamped receipt of the donation made. Such a receipt must contain the donor’s name, date of donation, and PAN of the organization.

About 12A Registration

Now that we have covered the 80G Registration, we will know about Section 12A and how to get registered under Section 12A of the Income Tax Act, 1961.

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.

80G and 12A Registration

What are the Documents Required for the 80G Registration?

The following documents are required for 80G registration is as follows:

  • MoA and Registration certificate in case of Section 8 companies and Societies and a Trust Deed in case of a Trust
  • No objection certificate from the owner of the property where the registered office of the Institution is situated
  • Form 10G
  • A copy of the PAN of the NGO
  • Copy of Utility Bills such as Electricity bill, water bill or House Tax Receipt
  • A list of the donors along with their address and PAN
  • The documents related to Income Tax Returns and the Book of Accounts of the past three years
  • The list of the welfare activities being carried out & the progress report of the last three years
  • A detailed list of the Board of Trustees
  • Original RC, MoA, or Trust Deed.

What are the Documents Required for 12A Registration?

The following documents are required for 12A registration:

  • Documental evidence of the creation of the Trust or NGO {Trust Deed of a Trust; Registration Certificate and Memorandum of Association {MOA} of a society}
  • Section 8 companies need to submit a certificate of incorporation and copies of MoA and AoA of the company
  • Form 10A.
  • Three-year bank account statement of the Trust.
  • PAN of the organization.

Registration procedure for 80G Registration

80G Registration procedure consists of the following steps:

  • Apply for an 80G certificate to the Commissioner of Income Tax (Exemption) within the jurisdictional area of the entity along with the required documents.
  • An on-premise inspection is done by the Income Tax department after the form, and the required documents for 80G registration are submitted
  • However, the Income Tax Officials might ask for additional documents or evidence if they seem unfit, or if they feel anything is missing
  • Upon satisfactory verification of documents and the office of the NGO, 80G certificate is granted to the institution by the Commissioner.

Note: The Validity of an 80G Certificate is for a lifetime of the institution.

What is the Procedure for 12A Registration?

You are required to follow these steps for 12A registration:

  • You need to file an application in the Form 10A, as per Rule 17A of the Income Tax Act, 1961
  • The application needs to be filled as per the guidelines of the Jurisdictional Commissioner of Income Tax (Exemptions)
  • The Commissioner verifies the genuineness of the activities of the organization, once he receives the Form and the documents. Also, he can call for additional documents or information if he considers necessary
  • On the satisfactory report, the Commissioner passes an order in writing for the grant of 12A Registration. If the Commissioner is not satisfied he will reject the application, after which the applicant is provided a fair chance to be heard.

12A Registration can be cancelled at any point of time subject to the proof that the organization is indulged in the following activities:

  • Is against the object of the institution
  • Are not genuine
  • Is benefitting a specific religion or caste
  • The funds are being invested in prohibited means
  • The income of the institution is used for the benefit of specific individual or group of persons

Note: The12A Registration is valid for a lifetime of such institution

Frequently Asked Questions

80G Certificate is given to a non-benefit association or non-legislative associations (NGO), a magnanimous trust or a Section 8 Company by the Income Tax Department. The goal behind the 80G testament is to energize an ever increasing number of contributors to give assets to such associations.

Some donations meet all requirements for either half or 100% assessment conclusion though some others fit the bill for a similar finding yet up to a most extreme restriction of 10% of Adjusted Gross Total Income of the citizen.

  • Donation in real money or check are qualified for the duty derivation.
  • 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.

By virtue of 12A registration, Trusts and NGOs and other Section 8 organizations appreciate exception from making good on annual assessment. NGOs are fundamentally associations that are intended for beneficent and non-benefit exercises. Nonetheless, they do have salary and would be required to pay charge according to ordinary rates if not enlisted under area 12A of the Income Tax Act.

12A registration is a one-time registration which is granted by the Income Tax Department to trusts and other not for profit organisations. The purpose of the registration is to be exempted from the payment of income tax. 12A registration is generally applied for immediately after incorporation.

  • Form 10A.
  • 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.

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