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12A and 80G Registration
Section 12A and 80G Registration – NGOs primarily rely on donations to support their functioning. To claim those tax exemptions (available to both donors and recipients), NGOs are to register under Section 80G and Section 12A of the Income Tax Act. The process is complicated and time-consuming, and it can be difficult for non-professionals to do it.
Moreover, recent changes have mandated that all the NGOs who have already registered under these 2 sections re-register under sections 80G and 12A to continue enjoying those tax benefits. Further, if an NGO seeks CSR funding, they are required to register using Form CSR-1.
Document Required for 12A and 80G Registration
- Registered trust deed/society registration certificate/incorporation certificate
- Self-certified copies of audited annual accounts for the preceding three financial years
- NGO DARPAN ID (if receiving government grants)
- FCRA ID (if receiving foreign donations)
- Self-certified copy of the certification previously obtained under 12A and 80G
- A note on the activities of the applicant.
What are the Documents Required for 12A Registration?
The documents required for 12A registration in India are as follows:
- Form 10A:This is the application form for 12A registration. It can be downloaded from the Income Tax Department website.
- Registration certificate:This is the certificate of registration issued by the government to the non-profit organization (NPO).
- Constitution:This is the document that sets out the NPO’s objectives, activities, and governance structure.
- Audited financial statements:These are the financial statements of the NPO for the past three years, which have been audited by a chartered accountant.
- Statement of charitable activities:This is a statement that describes the NPO’s charitable activities in detail.
- No objection certificate (NOC):This is a certificate from the owner of the property where the NPO’s registered office is located, stating that they have no objection to the NPO being registered under 12A.
The NPO must submit these documents to the Income Tax Department along with the application for 12A registration. The Income Tax Department will review the application and issue the certificate if the NPO meets the eligibility criteria.
The 12A registration is valid for a period of five years. The NPO must renew the certificate every five years.
What are the Documents Required for the 80G Registration?
The documents required for 80G registration in India are as follows:
- Form 10G:This is the application form for 80G registration. It can be downloaded from the Income Tax Department website.
- Registration certificate:This is the certificate of registration issued by the government to the non-profit organization (NPO).
- Constitution:This is the document that sets out the NPO’s objectives, activities, and governance structure.
- Audited financial statements:These are the financial statements of the NPO for the past three years, which have been audited by a chartered accountant.
- Statement of charitable activities:This is a statement that describes the NPO’s charitable activities in detail.
- No objection certificate (NOC):This is a certificate from the owner of the property where the NPO’s registered office is located, stating that they have no objection to the NPO being registered under 80G.
The NPO must submit these documents to the Income Tax Department along with the application for 80G registration. The Income Tax Department will review the application and issue the certificate if the NPO meets the eligibility criteria.
The 80G certificate is valid for a period of five years. The NPO must renew the certificate every five years.
Here are some additional things to keep in mind about 80G registration:
- The NPO must be a non-profit organization.
- The NPO’s activities must be charitable in nature.
- The NPO must be registered with the government.
- The NPO must have a constitution.
- The NPO must have audited financial statements.
- The NPO must submit a statement of its charitable activities.
- The NPO must obtain a no objection certificate from the owner of the property where its registered office is located.
Section 12A of the Income Tax Act, 1961
Section 80G of the Income Tax Act, 1961
Section 80G of the Income Tax Act, 1961 provides for deduction from income tax for donations made to certain charitable institutions. To be eligible for deduction under Section 80G, the charitable institution must be registered under Section 80G of the Income Tax Act, 1961.
Issuance of Certificate of Revalidated Registration
What is an 80G Certificate?
An 80G certificate is a document issued by the Income Tax Department of India to certain non-profit organizations (NPO) that allows donors to claim a tax deduction on their donations to the NPO. The certificate is named after Section 80G of the Income Tax Act, 1961, which provides for the tax deduction.
To be eligible for an 80G certificate, an NPO must meet certain criteria, such as being registered with the government and having a charitable purpose. The NPO must also submit an application for the certificate to the Income Tax Department.
Once an NPO has been granted an 80G certificate, donors can claim a tax deduction of up to 50% of the amount they donate to the NPO. The deduction is available for both individuals and businesses.
Here are some of the organizations that are eligible for an 80G certificate:
- Charitable trusts
- Educational institutions
- Hospitals
- Social welfare organizations
- Religious institutions
- Sports clubs
- Environmental organizations
About 12A Registration
Section 12A of the Income Tax Act, 1961, allows certain non-profit organizations (NPO) to be exempted from paying income tax on their surplus income. To be eligible for this exemption, the NPO must be registered with the government and must meet certain other criteria.
The 12A registration is a one-time registration that 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.
The following are the eligibility criteria for 12A registration:
- The NPO must be registered with the government.
- The NPO must have a charitable purpose.
- The NPO’s income must be derived from its charitable activities.
- The NPO’s income must not be used for the benefit of any individual or group of individuals.
- The NPO must maintain proper books of accounts and records.
The application for 12A registration can be made online or offline. The application must be accompanied by the following documents:
- A copy of the NPO’s registration certificate
- A copy of the NPO’s constitution
- A copy of the NPO’s audited financial statements
- A statement of the NPO’s charitable activities
The Income Tax Department will review the application and grant the registration if the NPO meets the eligibility criteria.
The 12A registration is valid for a period of five years. The NPO must renew the registration every five years.
Section 12A Registration
How to Register Under Section 12A?
All charitable trusts, societies, and Section 8 Companies, except private or family trusts, are eligible to register under Section 12A. But, before registration under 12A and 80G, an NGO has to first register with NGO Darpan, a register maintained by the Government of India, and then be registered under the Income Tax Act (This is not compulsory, it is an option available to trusts. A charitable organisation without Darpan can also apply for 12A and 80G) by following the steps mentioned below.
- Step 1:An application has to be filed in Form 10A with the Commissioner of Income Tax – Exemption
- Step 2:The required documents need to be submitted
- Step 3:Once the documents are submitted, the application will be reviewed by the Commissioner, who might ask for additional information
- Step 4:If everything is found to be satisfactory, the registration will be completed soon after, else it will be rejected.
Benefits of Section 12A Registration
- Provision to gain grants from governments and international organisations.
- Registration certificate serves as valid proof of the purpose of the NGO and its operations.
- All NGOs, be they trusts, companies, or societies, are eligible to avail exclusion from taxes
- FCRA registration benefits.
Section 80G Registration
How to Register Under Section 80G?
Any NGO that wants to register under Section 80G has to be duly registered and should be working specifically towards charitable objectives.
- Step 1:An application has to be filed in Form 10A with the Commissioner of Income Tax – Exemption.
- Step 2:Important documents are to be submitted
- Step 3:Upon submission, the documents would be reviewed by the Commissioner. If required, he may ask for additional documents or information and the same have to be provided within the timeframe to avoid rejection
Benefits of Section 80G Registration
- 80G certification enhances the prospects and credibility of any organisation
- Donors reap the benefits of less taxable incomes
- Possibility of attracting more donors
- Eligibility to get government funds
- NGO owners can seek foreign contributions without many hassles
New terms of Section 12A and 80G Registration and Re-registration
- Newly established trusts applying for income tax registration will be given provisional registration for three years. It becomes due for renewal either upon commencement of activities or upon completion of 3 years.
- For Re-Registration, the tenure will be revalidated by income tax authorities for a period of 5 years and renewal will fall due upon completion of 5 years.
Registration procedure for 80G Registration and 12A Registration
80G Registration
- The NPO must first obtain a registration certificate from the government. This can be done by applying to the Registrar of Societies in the state where the NPO is located.
- Once the NPO has a registration certificate, it can apply for 80G registration. The application form can be downloaded from the Income Tax Department website.
- The application form must be accompanied by the following documents:
- A copy of the NPO’s registration certificate
- A copy of the NPO’s constitution
- A copy of the NPO’s audited financial statements
- A statement of the NPO’s charitable activities
- A no objection certificate from the owner of the property where the NPO’s registered office is located
- The Income Tax Department will review the application and issue the certificate if the NPO meets the eligibility criteria.
12A Registration
- The NPO must first obtain a registration certificate from the government. This can be done by applying to the Registrar of Societies in the state where the NPO is located.
- Once the NPO has a registration certificate, it can apply for 12A registration. The application form can be downloaded from the Income Tax Department website.
- The application form must be accompanied by the following documents:
- A copy of the NPO’s registration certificate
- A copy of the NPO’s constitution
- A copy of the NPO’s audited financial statements
- A statement of the NPO’s charitable activities
- A no objection certificate from the owner of the property where the NPO’s registered office is located
- The Income Tax Department will review the application and issue the certificate if the NPO meets the eligibility criteria.
FAQs about 12A and 80G registrations:
NGOs can apply for 12A and 80G registrations online through the Income Tax Department’s website by submitting the necessary documents and fulfilling the eligibility criteria.
The process of obtaining 12A and 80G registrations can take several months, depending on the completeness of the application and the verification process by the Income Tax Department.