An NGO (Non-Government Organization) can apply for both 80G and 12A Registration in India. NGOs can apply for 12A certification for tax exemption and 80G certification for donor's tax exemption. Also, the validity of 12A and 80G Certificate is for a lifetime. A Non-Government Organization must apply for 80G and 12A registration in India, immediately after its incorporation.
What is 80G and 12A Registration in India?
80G Certificate is issued to Non-Government Organizations (NGOs) such as section 8 company or any charitable trusts by the Income Tax Department of India. The main objective of the 80G registration certificate is to encourage donors to donate to NGOs, as this certification offers the donor a 50% tax exemption whenever they make donations to such Non-Government Organizations (NGOs). The donor has to attach the stamped receipt of the donation made in order to avail of the exemption.
12A registration provides a one-time tax exemption to the NGOs, Trusts, and Section 8 Companies under section 12A of the Income Tax Act of 1961. Entities registered under section 12A are exempted from taxes on their surplus income. If any Trusts or NGOs are not registered under Section 12A, Income Tax Act, they have to pay tax as per normal rates.
When can you apply for 80G and 12A Registration in India?
You can immediately apply for a registration certificate under section 80G and12A after the NGO is registered. You can also apply the 12A and 80G Certificates together or separately. The application under Section 12A needs to be applied under Section 80G.
Eligibility Criteria for 80G and 12A Registration in India
The following is the eligibility criteria for 80G and 12A registration in India:
The NGOs should be registered under the Act.
Not applicable to the Family Trust or Private.
An NGO must be a charitable trust or a registered society.
NGOs should not have any income generated from a business.
NGOs have to maintain a regular book of accounts in favor of their expenses and receipts.
Anyone working for the benefits of any particular religion or caste should be not eligible for the Registration.
In the case of business-related, income NGOs has to maintain a separate book of accounts. All the donations received by the NGOs should not be used for other businesses.
What are the benefits of 80G and 12A Registration in India?
The following are the benefits of 80G registration:
After 80G registration, the donor can benefit from tax exemption on the income by providing the receipt of donation.
The main objective of the 80G registration certificate is to encourage donors to donate to NGOs, as this certification offers the donor a 50% tax exemption whenever they make donations to such Non-Government Organizations (NGOs).
The following are the benefits of the 12A registration:
Entities registered under section 12A of the Income Tax Act of 1961 have the key benefit of tax exemption in lieu of income utilization.
Entities registered under section 12A of the Income Tax Act of 1961 can receive grants from the Government and various private sectors or agencies.
NGOs can also avail of several benefits offered by the FCRA (Foreign Contribution Regulation Act) Registration.
What are the Documents required for 80G and 12A Registration in India?
The following are the documents required for the 80G Registration
No Objection Certificate (NOC) from the owner of the registered office.
MoA, Trust Deed, and the Registration certificate.
A certified copy of the PAN card of the NGO.
Form 10G
List of all the donors along with their PAN card and address proofs.
Copy of latest water bill, electricity bill, or House Tax receipt.
Balance sheet or Income Tax Returns, statement of accounts of the last three years.
A detailed list of the Trustees.
Progress report and the list of welfare activities of the last three years.
The following are the documents required for 12A registration.
Trust Deed of Trust, Registration Certificate, and Memorandum of Association (MOA) of a society.
For section 8 companies, the applicant has to submit certified copies of AoA and MoA of the company and Certificates of Incorporation.
Bank statement of the Trust for the last three years.
Form 10A.
PAN card of the organization.
What is the procedure for 80G Registration?
Before commencing the registration process, the applicant entity has to ensure that all the required documents for 80G registration are collected.
The applicant entity has to pursue the following steps to get an 80G registration certificate:
The applicant entity has to apply to the Commissioner of Income Tax Department.
Then, inspection is done by the concerned authorities of the Income Tax Department, and the required documents are submitted for 80G Registration.
If Income Tax authorities are not satisfied with the application or anything is missing in the application or documents, the authorities can ask for extra or additional documents.
After the verification of the NGO's office and all the documents are completed, and the Income Tax authorities are satisfied, the Commissioner of Income Tax will issue the80G Certificate.
What is the procedure for 12A Registration?
Before commencing the registration process, the applicant entity has to ensure that all the required documents for 12A registration are collected.
The applicant entity has to pursue the following steps to get a 12A registration certificate:
First, the applicant entity has to apply in Form 10A, as per Rule 17A of the Income Tax Act, 1961.
The applicant entity has to fill the application under the guidelines of the Jurisdictional Commissioner of Income Tax.
Then, inspection is done by the concerned authorities of the Income Tax Department, and the required documents are submitted for 12A Registration after the form is received.
If Income Tax authorities are not satisfied with the application or anything is missing in the application or documents, they might ask for extra or additional documents.
After the whole process is duly completed and the authorities are satisfied, the Commissioner passes an order to grant the 12A certificate.
Conclusion
80G and 12A Registration in India are very helpful in different ways, such as it attracts more donors; it also helps to raise funds from the Government, and it also builds trust. The donors can avail of the tax exemption benefits from their income by giving a receipt of donation. All these changes help to avoid any tax evasion and malpractices related to it.