{"id":17217,"date":"2020-10-02T11:30:09","date_gmt":"2020-10-02T06:00:09","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=17217"},"modified":"2020-10-01T15:15:09","modified_gmt":"2020-10-01T09:45:09","slug":"important-updates-on-80g-and-12a-applications-for-ngos","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/important-updates-on-80g-and-12a-applications-for-ngos\/","title":{"rendered":"Important Updates on 80G and 12A Applications for NGOs"},"content":{"rendered":"\n<p class=\"has-drop-cap\">NGOs in India have always been exempted from certain kinds of tax norms. Such exemptions are provided under Section 12A and 80G of Income Tax Act. Section 12A provides that NGOs with 12A registration can be fully exempted from the Income Tax Department. And, NGOs with <a href=\"https:\/\/corpbiz.io\/80g-and-12a-registration\"><strong>80G registration<\/strong><\/a> provide benefits to the donor of any NGO. The donor gets financial benefits in his taxable amount of their income. If NGOs don\u2019t get such registrations, then in that care they are subjected to regular tax rates. Also, attracting donors for donations becomes difficult. In this blog, we are going to shed some light on the important updates on 80G and 12A Applications.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/important-updates-on-80g-and-12a-applications-for-ngos\/#Changes_in_Norms_for_80G_and_12A_Applications\" >Changes in Norms for 80G and 12A Applications<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/important-updates-on-80g-and-12a-applications-for-ngos\/#Advantages_of_New_Amendment_for_80G_and_12A_applications\" >Advantages of New Amendment for 80G and 12A applications<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/important-updates-on-80g-and-12a-applications-for-ngos\/#Disadvantages_of_New_Amendment_for_80G_and_12A_applications\" >Disadvantages of New Amendment\nfor 80G and 12A applications<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/important-updates-on-80g-and-12a-applications-for-ngos\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Changes_in_Norms_for_80G_and_12A_Applications\"><\/span>Changes in Norms for 80G and 12A Applications<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Recently, in the Budget of 2020 presented on February 1, 2020, some changes were introduced in the current norms for the exemptions under Section 80G and 12A Applications. It was said that all these amendments were to be made effective from June 1, 2020 but due to the current crisis prevailing in the country, the new date of compliances shall begin from October 1, 2020 and shall continue till December 1, 2020.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/registration-of-ngo-in-india-under-12a-and-80g\/\">Tax Exemption for NGOs: Section 12A &amp; 80G<\/a><\/mark><\/p>\n\n\n\n<p><strong><em>Following are the changes in the norms which were made in the Budget 2020 for 80G and 12A Applications:-<\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"592\" height=\"340\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/10\/image-6.png\" alt=\"80G and 12A Applications\" class=\"wp-image-17218\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/10\/image-6.png 592w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/10\/image-6-300x172.png 300w\" sizes=\"(max-width: 592px) 100vw, 592px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Obtaining New License<\/h3>\n\n\n\n<p>All the existing NGOs which are already registered or approved under Sections 12A, 12AA, 10(23C), and 80G of <em><strong>Income Tax, 1961<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/The_Income-tax_Act,_1961\"><em><strong>[1]<\/strong><\/em><\/a><\/sup> are compulsorily required to obtain fresh registration from Income Tax Authorities under Section 12AB.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Re-application for registration<\/h3>\n\n\n\n<p>All the NGOs which are already\nregistered under Sections 12A, 12AA and 80G of Income Tax Act, 1961 will now be\nrequired to apply again for registration by December 1, 2020.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Introduction of Section 12 AB<\/h3>\n\n\n\n<p>The new Section 12AB proposes to change\nthe registration process by prescribing time frame for processing the\napplication and all the existing NGOs already registered under Sections 12A, 12AA\nand 80G would move to new rules and regulations prescribed under Section 12AB\nby January 1, 2021. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Filing of Statement of Donation<\/h3>\n\n\n\n<p>All the NGOs will now have to file\nstatements of donation received and issue of donation certificate to donors. On\nfailure to file such statements by these institutions, heavy fines and penalty\nwill be imposed by the concerned authority. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Insertion of Clause (ac) under\nSection 12 A (1)<\/h3>\n\n\n\n<p>Further, a new clause (ac) has been\ninserted in Section 12 A (1) which provide that all the NGOs registered under\nSection 12A or under Section 12AA shall be required to makes an application in\nthe relevant form to the Principal Commissioner or Commissioner for\nregistration of trust. It should be within three months from the date of such\namendment and such an NGO shall obtain registration under Section 12AB.<\/p>\n\n\n\n<p>When any application is made under Section 12A(1)(ac)(i) by the NGO already registered under Section 12A or Section <a href=\"https:\/\/corpbiz.io\/12aa-registration\"><strong>12AA registration<\/strong><\/a> shall be granted by the Principal Commissioner by passing an order within three months from the end of the month in which application was received and such registration shall be valid for the period of five years. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Enquiry by Principal Commissioner<\/h3>\n\n\n\n<p>At the time of renewal, the Principal\nCommissioner or Commissioner shall call for such documents or information to\nmake an enquiry about the objects and genuineness of the activities of NGOs and\nthe compliance of the requirement of any other law and it is only after\nachieving these objectives by the NGOs, the Commissioner shall pass an order\nfor granting of re-registration under Section 12AB.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Validity of registration <\/h3>\n\n\n\n<p>The registration will be valid for a\nperiod of five years only and all the NGOs again have to apply for such registration\non the expiry of said period, failing their name will be struck down from the\nlist. The application for renewal shall be made before six months prior to the\nexpiry of five years validity period. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Filing Online Application<\/h3>\n\n\n\n<p>The process of application will be\nonline and there will be a period of three months provided to such NGOs within\nwhich they have to submit their application.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Other various changes<\/h3>\n\n\n\n<ul><li>All those NGOs which are newly\nestablished applying to Income Tax Department for registration for the first\ntime are given provisional registration for three years.<\/li><li>Prior to six months from the expiry of\nthree years provisional registration, an application for renewal of provisional\nregistration or rather registration has to be made.<\/li><li>Tax deductions under Section 80G will\nnot be available to donors who opt for reduced rate of tax.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advantages_of_New_Amendment_for_80G_and_12A_applications\"><\/span>Advantages of New Amendment for 80G and 12A applications<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The advantages of New Amendment are as\nfollows-<\/em><\/strong><\/p>\n\n\n\n<ul><li>The process of revalidation of all the NGOs will enable the Government to remove all the inactive and no longer functioning NGOs.<\/li><li>The renewal of registration after every five years will provide an opportunity to withdraw the exemptions without going through the complicated cancellation provisions.<\/li><li>This process of registration will curb the process of malpractices which these institutions undergo for private profiteering rather than any genuine social work.<\/li><li>Since the process is completely online, it will simplify the compliance for the new and existing NGOs.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Disadvantages_of_New_Amendment_for_80G_and_12A_applications\"><\/span>Disadvantages of New Amendment\nfor 80G and 12A applications<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The disadvantages of new amendments are\nas follows-<\/em><\/strong><\/p>\n\n\n\n<ul><li>The new process of registration will impose higher administrative burden on tax authorities.<\/li><li>This new process of registration will become more cumbersome and costlier to the NGOs.<\/li><li>Additional burden on NGOs in case of delayed filing of returns.<\/li><li>NGOs dependent on overseas funds are exposed to higher risks.<\/li><li>Greater control and leverage on Government authorities to monitor and control the activities of NGOs.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Indian Government is trying hard each and every day to prevent the use of any malpractices in institutions be it private, non-private or for charitable purposes. In the past, many <a href=\"https:\/\/corpbiz.io\/ngo-registration\"><strong>registered NGOs<\/strong><\/a> under Section 80G and 12A application were found to be engaged in these activities and using it for personal gains rather than social work and so to curb these activities, the Government has come up with this new amendment.  With new era, all the process will be completely online and it will prevent all the complex procedure of physical registration. Though there will be a burden (administratively and economically) on NGOs as well as the concerned authority but undoubtedly, it will prove to be beneficial for everyone.  <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/charitable-institutions-related-changes-12a-12aa-and-80g-budget-2020\/\">Charitable Institutions Related Changes u\/s 12A\/12AA and 80G-Budget 2020<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>NGOs in India have always been exempted from certain kinds of tax norms. Such exemptions are provided under Section 12A and 80G of Income Tax Act. Section 12A provides that NGOs with 12A registration can be fully exempted from the Income Tax Department. And, NGOs with 80G registration provide benefits to the donor of any [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":17227,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[192],"tags":[1060],"acf":{"service_id":"12"},"authorName":"Sakshi Srivastava","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/IMG-20180130-WA0007.jpg","authorDescription":"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.","postViews":8484,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/17217"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=17217"}],"version-history":[{"count":9,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/17217\/revisions"}],"predecessor-version":[{"id":17229,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/17217\/revisions\/17229"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/17227"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=17217"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=17217"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=17217"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}