80G and 12A are provisions under the Indian Income Tax Act, 1961 that provide tax exemptions and benefits to organizations that are engaged in charitable or religious activities. Here is some information about 80G and 12A registrations:
Section 80G of the Indian Income Tax Act allows donors to claim a deduction for donations made to certain charitable organizations. To be eligible for 80G registration, the organization needs to be registered as a Trust, Society, or Non-profit company under the relevant laws in India. Once registered under Section 80G, donations made to the organization are eligible for a tax deduction of up to 50% of the donated amount, subject to certain conditions.
Process of Accessing the 80G Registration:
Registration under this section will be processed by the Commissioner of Income Tax after receiving an application from the applicant in Form 10G. The application should be accompanied by the following documents:
NOC from the proprietor of the land where the registered office is situated.
Copy of the Pan Card of the Trust/Institution.
Copy of electricity bill, house tax receipt, or water bill
Proof of welfare activities pursued
Progress Report since the foundation of the NGO or for the previous 3 years
The statement of accounts and balance sheet since the foundation/previous 3 years
List of contributors along with their address and PAN.
List of governing body of trustees with their contact details
Copy of registration granted under section 12A or copy of notification issued under section 10(23)or section 10(23C).
Benefits of the 80G Certificate for NGOs
As per society bylaws, 80G certification makes your NGO a promising prospect by enhancing the credibility of the organization and the reliability of those associated with it.
80G certification effectively enables an NGO’s donor to not just feel good about making a donation for a cause but also provides them with an incentive of having a tax advantage.
Only an NGO registered under both 12Aand 80G is eligible for availing of government funding.
Getting an 80G registration also helps in securing foreign contributions.
Section 12A of the Indian Income Tax Act grants an exemption from income tax to charitable or religious organizations on their income. To be eligible for 12A registration, the organization needs to be registered as a trust, society, or non-profit company under the relevant laws in India. The registration needs to be done within a year from the date of establishment of the organization. Once registered under Section 12A, the organization is exempt from paying income tax on its income.
It's important to note that these registrations need to be renewed periodically to maintain their validity. Organizations can apply for 80G and 12A registrations with the Income Tax Department in India. It's recommended that organizations seek professional help in the application process, as it can be a complex and time-consuming process.
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Tax exemption: Once an NGO obtains 12A registration, it becomes eligible for tax exemption. This means that any income generated by the organization will not be taxed, and any donations made to the organization will be eligible for tax deductions.
Access to government funding: Many government schemes and funding opportunities are available exclusively for registered NGOs. Having a 12A registration can help an NGO access these funds and schemes.
Increased credibility: Obtaining 12A registration can help an NGO establish credibility with donors, partners, and other stakeholders. It shows that the organization is committed to transparency and accountability, and adheres to certain standards set by the government.
Perpetual existence: Once an NGO obtains 12A registration, it enjoys perpetual existence. This means that the organization can continue to exist even if its founding members leave or pass away.
Better governance: The process of obtaining 12A registration involves submitting certain documents and undergoing scrutiny by the Income Tax Department. This can help an NGO establish better governance practices and ensure that it is functioning in a legal and ethical manner.
A self-certified copy of the instrument which was used to create the trust or establish the institution shall be submitted.
The institution or trust may have been created otherwise than by way of drafting and registering an instrument. In such cases, a self-certified copy of the document evidencing the creation of the trust, or establishment of the institution should be submitted to the Income Tax Department.
It is necessary to submit a self-certified copy of the registration, which was made with the applicable body. The applicable body may be the Registrar of Companies, the Registrar of Firms and Societies or Registrar of Public Trusts.
A self-certified copy of the documents which provide evidence for adoption or modification of the objectives of the entity shall be submitted.
Annual financial statements for three preceding financial years
Note on the activities conducted by the entity
In certain cases, the Income Tax department may cancel the registration granted under this section. After rectifying the default, the assesee is allowed to make a subsequent application. In such cases, it is necessary to submit a self-certified copy of the existing order granting registration.
The assesee may have previously applied for registration under this section. The application may have been rejected. In such cases, a self-certified copy of the order of rejection should be attached with the application.