{"id":50879,"date":"2022-11-22T17:20:02","date_gmt":"2022-11-22T11:50:02","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=50879"},"modified":"2024-04-23T18:14:54","modified_gmt":"2024-04-23T12:44:54","slug":"what-are-the-benefits-of-12a-and-80g-registration","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/what-are-the-benefits-of-12a-and-80g-registration\/","title":{"rendered":"What are the Benefits of 12A and 80G Registration?"},"content":{"rendered":"\n<p>There are certain organisations which are liable for tax exemptions as provided under the Income Tax Act, 1961. Organisations not operating for profits, like NGOs, charitable trusts, religious organisations, Section 8 companies, are made eligible for tax exemptions. Section 12A &amp; Section 80G of the <strong>Income Tax Act, 1961<\/strong> provide for such exemptions toinstitutions established in India which are not operating for profits. These organisations need to get registered under <a href=\"https:\/\/corpbiz.io\/80g-and-12a-registration\"><strong>Sections 12A and 80G<\/strong><\/a> and obtain certificates thereunder to avail of the exemptions, failing which they would not receive the many benefits that would otherwise be available after obtaining these certificates. Before obtaining certificates under the above sections, the institution must have an NGO registered under the Income Tax Act by filing Form 10A; only then can it apply for tax exemptions. Scroll down to check the benefits of 12A and 80G Registration in India.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Meaning of 12A and 80G Registration<\/h2>\n\n\n\n<p>Before we discuss the benefits\nof 12A and 80G Registration in India, let&#8217;s understand the meaning of 12A and 80G\nRegistration in India.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Section 12A Registration<\/strong><\/h3>\n\n\n\n<p>Section\n12A registration applies to organisations working not for profit like NGOs,\ncharitable trusts, religious organisations, Section 8 companies. Once duly\nregistered under 12A, these organisations are eligible to avail of tax\nexemptions on their surplus income. It is a one-time registration and the\ncertificate of an exemption obtained hereunder has lifetime validity. It is\nadvisable that NGOs and other not-for-profit organisations get registered under\nthis section right after their incorporation and avail of the beneficial tax\nexemptions.<\/p>\n\n\n\n<p><strong><em>There\nare certain documents required to obtain Section 12A registration, namely:<\/em><\/strong><\/p>\n\n\n\n<ul>\n<li>Documents evidencing the creation of\nthe trust or organisation (trust deed or any other instrument, certificate of\nincorporation, copies of MOA and AOA for Section 8 companies, MOA and\nregistration certificate for societies)<\/li>\n\n\n\n<li>Copy of PAN of the organisation<\/li>\n\n\n\n<li>Form 10A<\/li>\n\n\n\n<li>Where the organisation is a trust,\nthe annual accounts for the last three years.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Section 80G Registration<\/strong><\/h3>\n\n\n\n<p>Section 80G Registration under the Income Tax\nAct, 1961 is provided to organisations working not for profit like NGOs,\ncharitable trusts, religious organisations, Section 8 companies. The main aim\nof this certificate is to encourage donors to provide donations. The donors\nmaking such donations are eligible to avail tax reductions. All they have to do\nis attach the receipt of the donation made, with information as to the name of\nthe donor, date of donation and PAN of the organisation, to avail the\nexemption.<\/p>\n\n\n\n<p><strong><em>There\nare some crucial documents which are required to be provided while applying for\nRegistration under Section 80G namely:<\/em><\/strong><\/p>\n\n\n\n<ul>\n<li>Documents evidencing the creation of\nthe trust or organisation (trust deed or any other instrument, certificate of\nincorporation, copies of MOA and AOA for Section 8 companies, MOA and\nregistration certificate for societies)<\/li>\n\n\n\n<li>Copy of PAN of the organisation<\/li>\n\n\n\n<li>Form\n10G<\/li>\n\n\n\n<li>No\nObjection Certificate (NOC) from the owner of the property where the registered\noffice is situated<\/li>\n\n\n\n<li>Copy\nof the utility bills of the organisation<\/li>\n\n\n\n<li>List\nof donors with details of their address and PAN<\/li>\n\n\n\n<li>documents\nrelated to the book of accounts and income tax returns<\/li>\n\n\n\n<li>Details\nof welfare activities carried out by the organisation within the last 3 years<\/li>\n\n\n\n<li>Where\nthe organisation is a trust, there is a detailed list of the board of trustees.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Benefits\nof Obtaining 12A and 80G Registration<\/strong><\/h2>\n\n\n\n<p>The following are the benefits of\n12A and 80G Registration:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Benefits of\n12A Registration \u2013 Benefits of 12A and 80G Registration<\/strong><\/h3>\n\n\n\n<p>There are many benefits available to non-profit\ninstitutions when registered under Section 12A of the Income Tax act, 1961.\nFollowing are some of the benefits available once registered: <\/p>\n\n\n\n<ul>\n<li><strong>Tax\nExemption<\/strong><\/li>\n<\/ul>\n\n\n\n<p>By furnishing a 12A certificate, such institutions are exempted from paying tax on income generated. <\/p>\n\n\n\n<ul>\n<li><strong>Grants\nand Funds from Government and International Organizations<\/strong><\/li>\n<\/ul>\n\n\n\n<p>12A certificate makes these institutions\neligible to avail funds, various schemes and grants from the government and\ninternational organisationsas it grants legitimacy to the institutions.<\/p>\n\n\n\n<ul>\n<li><strong>Proof\nof Existence<\/strong><\/li>\n<\/ul>\n\n\n\n<p>A certificate under 12A acts is considered\nlegitimate proof of the existence of the institution, and this proof can be\nused to avail the aforementioned international and government schemes, grants\nand funds.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Benefits of obtaining Registration under Section 80G &#8211; <\/strong><strong>Benefits of 12A and 80G Registration<\/strong><strong><\/strong><\/h3>\n\n\n\n<p>The\ndirect beneficiary under 80G is the donors of these organisations, while the organisations\nalso benefit as these benefits fuel ore donors to make sizeable donations to\nthese non-profit organisations. The benefits arising under the 80G certificate\nare as follows:<\/p>\n\n\n\n<ul>\n<li><strong>Tax exemption to donors<\/strong><\/li>\n<\/ul>\n\n\n\n<p>The\ndonor is eligible to deduct a portion of the amount donated to these\norganisations from his\/her taxable income.<\/p>\n\n\n\n<ul>\n<li><strong>Increase in goodwill and credibility\nof the organisation<\/strong><\/li>\n<\/ul>\n\n\n\n<p>80G\ncertificate gives legitimacy and credibility to the organisation and hence\nhelps in increasing its goodwill, which will further encourage more donors to\ndonate.<\/p>\n\n\n\n<ul>\n<li><strong>Government funding<\/strong><\/li>\n<\/ul>\n\n\n\n<p>NGOs\nand other charitable organisations with 80G registration are likely to receive\nmore government funding and international contribution.<\/p>\n\n\n\n<p>Eligibility to obtain 12A and 80G registration<\/p>\n\n\n\n<p>Registrations under Section 12A and 80G are provided to NGOs, charitable organisations, trusts and societies if they fulfil the following conditions:<\/p>\n\n\n\n<ol>\n<li>No\nincome must be generated from the business.<\/li>\n\n\n\n<li>These\norganisations should either be charitable or trust or registered societies or\nSection 8 companies.<\/li>\n\n\n\n<li>These\norganisations must be using their assets or income only for the purpose of charity.<\/li>\n\n\n\n<li>They\nshould maintain a regular book of accounts of the activities of the\norganisation<\/li>\n\n\n\n<li>The\nowners or trustees should not be deriving undue benefits from the\norganisation&#8217;s funds.<\/li>\n\n\n\n<li>The\nwork should not be related to the benefit of particular religion or caste.<\/li>\n\n\n\n<li>If\nthese organisations have income generated from any business, there should be a\nseparate book of accounts for the same, and any donations received for\ncharitable purposes shall be kept separate.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusions<\/h2>\n\n\n\n<p>Charitable organisations working not for profit are rightly given benefits under the Income Tax Act, 1961, in the form of tax exemptions and various other benefits. After registering one\u2019s NGO or other similar organisation, one should also get it registered under Sections 12A &amp; 80G of the Income Tax Act to reap the benefits of 12A and 80G Registration which the legislature has provided to them. These benefits of 12A and 80G Registration not only encourage more people to get involved in charitable work but also pushes existing donors to make more donations, while also attracting new donors to the organisation.<\/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","protected":false},"excerpt":{"rendered":"<p>There are certain organisations which are liable for tax exemptions as provided under the Income Tax Act, 1961. Organisations not operating for profits, like NGOs, charitable trusts, religious organisations, Section 8 companies, are made eligible for tax exemptions. Section 12A &amp; Section 80G of the Income Tax Act, 1961 provide for such exemptions toinstitutions established [&hellip;]<\/p>\n","protected":false},"author":47,"featured_media":50892,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[192],"tags":[2886],"acf":{"service_id":"401"},"authorName":"Sherin Jose","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/11\/MicrosoftTeams-image-4-e1668575330329.jpg","authorDescription":"Sherin has degrees in Law and English Literature from the University of Delhi. She is adept at legal research and writing and enjoys discussing and analysing important legal developments. Her primary interests lie in Corporate, FinTech and IPR Law and she is always on the lookout for exploring new developments in the area. She is an avid reader who loves classics and contemporary fiction. She likes to travel, bake and obsess over cat videos in her free time.","postViews":8957,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/50879"}],"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\/47"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=50879"}],"version-history":[{"count":6,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/50879\/revisions"}],"predecessor-version":[{"id":63812,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/50879\/revisions\/63812"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/50892"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=50879"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=50879"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=50879"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}