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Sakshi Srivastava
| Updated: 02 Nov, 2020 | Category: NGO, Section 8 Company

What is the Process to obtain 12A and 80G Registration for My NGO?

12A and 80G Registration

It is mandatory for all the NGOs such as Society, Trust or a Section 8 Company to get 12A and 80G Registration. Certificate of 80G Registration is issued by the Income Tax Department under Income Tax Act, 1961, and the main objective of registering 80G is to motivate donors to donate funds to the Organization. In contrast, the main aim of 12A registration is that the company under the Section 12A doesn’t need to pay income tax as they are exempted from it. Scroll down to get more information regarding 12A and 80G Registration in India.

What are the Benefits of 12A and 80G Registration?

Following are some essential benefits of 12A and 80G Registration:-

1. Benefits of 12A Registration are as follows:-

  • Exemption from Income Tax.
  • An organization which is registered under Section 12A is eligible to receive Government and various private sector grants.
  • The organization registered can take benefits for accumulating or setting aside income of the NGO given that it should not be more than 15%.
  • The addition of income gets included as income application as per Section 11(2), will not be included in the total income of the NGO.
  • NGOs are permitted to receive grants and funds from various government agencies or International agencies. These agencies are required to provide grants as well as funds to NGOs having 12A Registration.
  • Avail benefits under FCRA or Foreign Contribution Regulation Act, 2010.
  • It’s a one-time registration process, and it will be active till the date of cancellation. It does not require any renewal until and unless specified by any government notification or a change existing provisions.
  • Finance Act, 2014 has stretched the benefits of trust or a section 8 company registration that has been registered under Section 12A.

2. Benefits of 80G Registration are as follows:

  • It makes the NGO a promising vision, enhancing its goodwill and confidence of those associated with your brand.
  • If an NGO registered under 12A and 80G registration is eligible for Government funding.
  • This registration also helps to seek foreign contribution.
  • It attracts the donor to donate any charitable trusts.

What is the Eligibility Criterion for 12A and 80G Registration?

Following is the eligibility criteria for 12A and 80G Registration in India:-

  • The NGOs must be registered under the Act.
  • Not applicable to the Family Trust or Private Trust.
  • They should be a charitable trust or a registered society.
  • They must not have any income generated from a business.
  • Maintain a regular accounts book in favor of their expenses and receipts.
  • Anyone working for any particular religion or caste should not be eligible for this registration.
  • In business-related case, the income they should maintain a separate book of accounts. All the donations received by the NGOs must not be used for such businesses.

What are the Essential Documents Required for 12A and 80G Registration?

Following are some vital documents required at the time of 12A and 80G registrations:

1. Documents needed for 12A Registration are as follows:

  • 10A Form.
  • Trust Deed of a Trust.
  • MOA and registration certificate of a society.
  • Submit a copy of Certificate of Incorporation, Memorandum of Association (MOA), and Article of Association (AOA) of the Section 8 companies.
  • Last three year bank statement of the Trust.
  • PAN of the organization.
  • Self-certified copy of registration under Section 12A (If any)

2. Documents required for 80G Registration are as follows:

  • Form 10G.
  • In the case of Societies and Section 8 Companies, submit registration certificate, and Memorandum of Association (MOA).
  • In the case of Trust, submit Trust Deed.
  • NOC from the property owner where the registered office is situated.
  • Submit a copy of the PAN of the NGO.
  • Submit a copy of the latest electricity bills, water bills, gas bills, telephone bills or House tax receipt.
  • Submit a donor list along with their PAN and address.
  • Submit the last three years of the book of accounts and ITR (Income Tax Return) documents.
  • Submit original RC, Trust Deed or MOA.
  • Detailed list of the boards of trustees.
  • Last three years progress report and all the welfare activities lists.

What is the Procedure for 80G Registration?

Follow these steps to get 80G Registration done. Before the Registration, first, make sure that you have all the required documents for 80G Registration, as mentioned above.

  • Apply for 80G Certificate through Form 10G to the Commissioner of Income Tax along with the required documents.
  • Then, inspection is done by the Income Tax Department, and the required documents are submitted for 80G Registration.
  • If Income Tax Officials find anything missing, they might ask for some extra or additional documents.
  • After the successful verification of the application and all the documents, the Commissioner of Income Tax will issue the 80G Certificate.
Note: The validity of the 80G certificate is for the lifetime.

Situations under which Governments can Reject Claim for 80G Registration

Following are the situations under which the government can reject your claim for 80G Registration:

Governments can Reject Claim for 80G Registration
  •  No Religious Activity

The charities that involves religious moral and are must be done towards a particular caste or creed are not allowed to get 80G registration.

  • Separation of Business and Charity

If the business is involved in any financial transactions and it is not for donations alone, you are required to keep them separate. 

  • No Misuse

A strict accounting is mandatory which means that the donations received should be towards the cause and it must not be used for any other purpose.

  • Diversion of funds

If any NGO is found funding a political party then your 80G Registration will get rejected.

  • Non-Exemption

The registered NGOs should not hold any Non-Exemption of Income.

What is the Procedure for 12A Registration?

Follow these steps to get 12A Registration done. Before the Registration, first make sure that you have all the required 12A Registration documents, as mentioned above.

  • First, apply the Form 10A, as per Rule 17A of the Income Tax Act, 1961[1].
  • You need to fill the application under the guidelines of the Jurisdictional Commissioner of Income Tax.
  • Then, inspection is done by the Income Tax Department, and the required documents are submitted for 12A Registration after the form is received.
  • If Income Tax Officials find anything missing, they might ask for some extra or additional documents.
  • After the whole process, the Commissioner passes an order for the grant of 12A certificate. The Commissioner will reject the application form if he/she discovers anything wrong.
Note:The validity of a 12A certificate is for the lifetime.

Conclusion

12A and 80G Registration is very helpful in different ways, such as it attracts more donors; it also helps raise the fund from the Government, builds Trust, and so on. The registration application can be filed separately or together as well. To avoid any chance of rejection, you must submit all the documents carefully. Contact Corpbiz Professionals to know details about NGO Registration and Registration under 12A & 80G.

Read our article: Tax Exemption for NGOs: Section 12A & 80G

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Sakshi Srivastava

Sakshi has pursued B.B.A.LL.B.(IPR Hons.). She is an avid reader and is keen to gather and share her knowledge on the subjects relating to IPR, Company Law and GST. Priorly she has worked as a legal researcher and vide her articles she aims at improving the core knowledge of the subjects to the masses.

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