12A and 80G Registration

Overview of 12A and 80G Registration

If an organization is registered as an NGO, it guarantees that its income is free from income tax. Donors to an NGO can get income tax exemption if the NGO has certification under section 80G of the Income Tax Act. Once the NGO registers, it can apply for registration under sections 12A and 80G.

Donors who register your NGO (Non-Governmental Organization) under 12A will be able to get tax advantages. Before providing services to non-profit groups like Charitable Trusts and NPOs, NGOs must meet this requirement. The organization and the contributors associated with it both gain from this tax exemption provision.

What is 12A and 80G Registration?

In India, non-profit organizations are essential to the country's social and economic advancement. Nevertheless, they lack a reliable source of income to produce their own profits.

Their primary sources of funding include grants, donations, and other unrestricted contributions. These contributions enable them to continue operating and easily accomplish their goals. The government aims to promote such donations to nonprofit groups through the 12A and 80G Registrations.

12A Registration

NGOs can apply for 12A registration under Section 12A of the Income Tax Act of 1961. The government gives these organizations tax exemption on money they get from grants, gifts, and other donations. All non-governmental organizations that wish to take Section 12A's benefits must register for it.

80A Registration

NGOs need to get 80G registration. This allows donors to deduct their contributions from their income. They may also qualify for a tax exemption..

The goal of 80G registration is to encourage more donations to NGOs. This helps fund their charitable work. Only after completing the 12A registration process, the NGOs can go for this registration.

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

The advantages of obtaining the 12A and 80G Certificates are mentioned below:

1. Government Schemes and Grant

An organization, like a society or non-profit, can apply for any government program or grant. To do this, they need to get the exemption certificate from Section 12A.

2. Tax Exemption

The NGO or Society would not be required to pay taxes if they were to claim this exemption. To be eligible for this exemption, the NGO would need to provide the 12A certificate.

3. Proof of Existence

This certificate serves as the government's official proof that this type of entity is registered. To qualify for a government grant or loan, legal verification will be given.

4. Application to Societies and Non-Profits Organizations

Groups that have followed the rules of the Societies Registration Act can also use this type of certificate.

What are the requirements for 12A and 80G Registration?

The following are essential requirements that must be met in order to be registered under Section 12A:

• Only trusts or institutions founded exclusively for religious or charitable purposes are eligible for 12A registration.
• The organization must engage in endeavors that achieve its charitable goals. The goal of these actions should not be to make money for any one person or group.
• The organization should legally register as a society or as a trust under the relevant statutes. Moreover, if it is a Section 8 Company, then it must register under the Companies Act of 2013.
• The organization should not use its resources to help its members or any specific person. You should use the money only for charitable or religious purposes.
• To represent its revenue, costs, and operations, the organization must have accurate books of accounts and other pertinent documentation.
• The organization cannot take part in any political activity. It must not support any political candidates or parties. Getting involved in politics may lead to the cancellation of the Section 12A registration.

You must meet the following essential requirements to register under Section 80G:

• Only non-profit groups, like societies, registered trusts, and section 8 companies, can get 80G registration. Creators must establish them for religious or charitable purposes.
• Organizations that want 80G registration must have income that is tax-exempt. This is according to Sections 11 and 12 of the Income Tax Act. The organization must already have the 12A registration certificate before applying for 80G registration.
• The fund's rules should clearly explain how its money and profits can be used. This makes sure that the money raised for charity is only spent for that purpose.
• An institution cannot be made just to help one caste or religious group to get Section 80G registration.
• Organizations that want to register under section 80G must keep accurate and consistent records of their financial transactions. This procedure is essential for proving responsibility and transparency in using funds.

Documents Required for 12A and 80G Registration

The list of documents required for 12A and 80G registration are as follows:

• A copy of NGOs PAN Card
• Section 8 company registration certificate and memorandum of agreement
• Trust deed
• Form 10A for registration under Section 12A
• Form 10G for registration under Section 80G
• Proof of address where the organization is registered
• Copies of utility bills (such as water and electricity bills)
• Books of accounts of last three years.
• Activity and Progress/Project Reports from the previous three years.
• Donor list with contact information.
• Last three years' bank account statements

12a and 80g Registration Process Online

Here is a step-by-step to avail the 12A and 80G Registration:

Step 1: Registration and Formation of NGO

Pick a trust, society, or Section 8 corporation for your NGO's legal structure. Make sure to follow your state's rules. After deciding on your organization's legal structure, legally register it with the Registrar of Societies, Registrar of Companies, or any other applicable regulating agency.

Step 2: Gathering Documents

Gather the necessary paperwork to submit form 10A with your 12A and 80G registration forms. These records often include several important documents.

They usually consist of the FCRA registration, NGO Darpan ID, and audited financial statements. Additionally, they may include the MOA, Bye Laws, Trust Deed, and your organization’s registration certificate, among others. These records will demonstrate the validity and existence of your non-profit organization.

Step 3: Filling the Form

Fill out Form 10A, the official application to request registration under Income Tax Act Sections 12A and 80G. You may get this form at the local income tax office or from the official website of the Income Tax Department. When filling out the form, ensure all information is correct and complete. This includes details about the goals, events, and members of your organization's governing body.

Step 4: Submitting the Application

Send the completed Form 10A to the Income Tax Commissioner's office. You can also submit it through the Income Tax website. Make sure to include the required paperwork.

With this submission, your 12A/80G registration procedure officially begins. For your records, retain copies of every document you submit.

Step 5: Examine and Assess

The tax authority will review your application when they receive it. They want to make sure your NGO meets the requirements for Section 12A/80G registrations. To verify compliance and authenticity, they could occasionally audit the operations and financial records of your company.

Step 6: Registration or Revocation

One of two things will happen, depending on the results of the inspection and review. Your NGO can register under Section 12A/80G.

This happens if the tax authority approves your application. Your NGO must also meet the requirements. If there are any problems or inconsistencies, your application will be returned. You can then submit your response.

Step 7: Notification of Registration

The tax authorities will issue an official registration certificate if your registration is approved. This certificate verifies the tax exemption for your NGO under Section 12A and 80G of the Income Tax Act.

It is an important document. It shows that your organization is legal. This allows you to claim tax exemptions for your donors and your non-profit.

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