12A and 80G Registration: A Guide for NGOs

Non-governmental organizations (NGOs) play an important role in society by providing services to those in need. However, NGOs can also be expensive to run. This is where 12A and 80G registration can help.

12A and 80G are sections of the Indian Income Tax Act that provide tax benefits to donors who make contributions to eligible NGOs. 12A registration allows NGOs to obtain tax exemption on their income, while 80G registration allows donors to deduct the amount of their donation from their taxable income.

What is the latest news or information all need to know about 12A and 80G registration?

As of July 24, 2023, the latest news and information about 12A and 80G registration are as follows:

    • The final filing date for registration or approval under Section 10(23C), 12A, or 80G of the Income Tax Act has been extended to September 30, 2022.
    • Trusts and other institutions that have an 80G Registration or 12A Certificate will now have to reapply under Section 12AB or make amended provisions as per Sections 10(23C) or 80G. All existing NGOs which have registered under Sections 12A, 12AA, 10(23C), or 80G will have to switch to Section 12AB via a new application .
    • If the NGO has existed before June 1, 2020, and has a valid 10(23C), 80G, and 12A registration, the NGO has to reapply as per the Finance Act 2020. NGOs had to make such applications within three months from June 1, 2020, which was extended to June 30, 2021, due to the Covid-19 pandemic.
    • All new 12A registrations will be given for five years only, and the organization has to apply for renewal after each five years. Earlier registration under 12A was given as a one-time registration, and once the registration is granted, it will hold good till cancellation.
    • To obtain registration under Section 12A, an application in Form 10A for registration of a charitable or religious trust or institution can be made. The application shall be addressed to the Commissioner of Income Tax and the necessary documents. The application should compulsorily be made in the online mode.
    • To revalidate 80G and 12A registration, an NGO needs to apply to the Income Tax authorities. Without revalidation, NGOs will not be able to avail of the tax benefits and exemptions available to them
    • The documents required for 80G registration include Form 10G, registration certificate and MoA in case of Section 8 companies and societies, trust deed in case of a trust, no objection certificate from the owner of the property where the registered office of the institution is located, PAN card copy of the NGO, copy of utility bills such as electricity bills, water bills, or house tax receipt, and donor list along with their complete address and PAN.

It is important for NGOs to stay up to date with the latest regulations and requirements for 12A and 80G registration to continue to avail of the tax benefits and exemptions available to them.

What is 12A Registration?

12A registration is a crucial provision under the Indian Income Tax Act that offers significant benefits to non-governmental organizations (NGOs) in India. It grants tax exemption on the income earned by registered NGOs, allowing them to channel their resources more effectively towards their charitable activities and social welfare programs. Obtaining 12A registration is an essential step for NGOs seeking financial stability and sustainability in their endeavors.

What are the Documents Required for 12A Registration?

To apply for 12A registration, NGOs need to submit the following essential documents:

  1. Registration Certificate: A copy of the NGO’s registration certificate issued by the relevant government authority, such as the Registrar of Societies or the Charity Commissioner. This certificate verifies the NGO’s legal existence as a non-profit organization.
  2. PAN Card Copy: A copy of the NGO’s valid Permanent Account Number (PAN) card issued by the Income Tax Department. PAN is a mandatory requirement for all entities, including NGOs, for tax-related purposes.
  3. Audited Financial Statements: The NGO should provide audited financial statements for the previous three years. These financial statements offer insights into the NGO’s financial health, transparency, and compliance with accounting standards.
  4. Details of Activities: The NGO should furnish comprehensive details of its charitable activities, including photographs, program reports, beneficiary testimonials, and other supporting materials. These documents validate the NGO’s genuine philanthropic efforts.

What are the Benefits of 12A Registration?

  1. Tax Exemption on Income: The primary advantage of 12A registration is that it provides tax exemption on the income generated by an NGO. This means that the NGO is not required to pay income tax on the funds it receives through donations, grants, or other sources related to its charitable activities. The saved funds can be reinvested into expanding the NGO’s initiatives, reaching more beneficiaries, and improving the overall impact of its programs.
  2. Attracting Donors and Funding: Being 12A registered enhances an NGO’s credibility and trustworthiness in the eyes of potential donors and funding agencies. Donors are more likely to contribute to an NGO with 12A registration, as it assures them that their donations will be utilized for genuine philanthropic purposes. This increased confidence can attract more donors, enabling the NGO to secure additional financial support for its projects.
  3. Government Grants and Collaborations: Government agencies often prefer to partner with registered NGOs when implementing social welfare programs and initiatives. Having 12A registration can open doors to collaborations with governmental bodies, allowing the NGO to access government grants and resources. This can significantly boost the NGO’s impact and reach, as it gains access to additional support and funding.

Requirements for 12A Registration:

To be eligible for 12A registration, an NGO must meet specific requirements set forth by the Income Tax Department. The key requirements include:

  1. Non-Profit Status: The NGO must operate on a not-for-profit basis and its activities should be solely focused on charitable or philanthropic purposes. It should not function with the intent of earning profits for its members or stakeholders.
  2. Registration with Government Authorities: The NGO must be legally registered under the applicable laws, such as the Societies Registration Act, 1860, the Indian Trusts Act, 1882, or as a section 8 company under the Companies Act, 2013.
  3. Valid PAN Number: The NGO must possess a valid Permanent Account Number (PAN) issued by the Income Tax Department. PAN is a unique identification number essential for all entities, including NGOs, for tax-related purposes.
  4. Timely Filing of Annual Returns: The NGO should ensure timely and accurate filing of its annual returns with the relevant government authorities. These returns provide a transparent account of the NGO’s financial transactions and charitable activities.

Application Process for 12A Registration:

The application process for 12A registration involves the following steps:

  1. Obtain Form 10A: The NGO should obtain Form 10A from the Income Tax Department or download it from the official website.
  2. Complete Form 10A: The NGO must duly fill out Form 10A with accurate information and ensure all required documents are attached.
  3. Submit the Application: The completed application form, along with the necessary documents, should be submitted to the Income Tax Department or the designated authority.
  4. Verification and Approval: The Income Tax Department will review the application and conduct necessary verification. If all requirements are met, the NGO will be granted 12A registration and issued a certificate of registration.

80G Registration for NGOs

What is 80G Registration?

Section 80G of the Indian Income Tax Act provides an additional incentive to NGOs and charitable institutions by encouraging individual and corporate donors to contribute generously to their causes. 80G registration allows donors to claim tax deductions for the donations they make to registered NGOs, making it a powerful tool for NGOs to garner support from a broader donor base.

What are the Documents Required for 80G Registration?

To apply for 80G registration, NGOs must provide the following key documents:

  1. 12A Registration Certificate: A copy of the NGO’s existing 12A registration certificate issued by the Income Tax Department. 80G registration is dependent on having a valid 12A registration, as it is an extension of the same.
  2. PAN Card Copy: A copy of the NGO’s valid Permanent Account Number (PAN) card issued by the Income Tax Department. As with 12A registration, PAN is a mandatory requirement for availing of tax benefits under 80G.
  3. Audited Financial Statements: The NGO should furnish its audited financial statements for the previous three years, highlighting the proper utilization of donations and compliance with tax regulations.
  4. Form 10G: The application form for 80G registration, known as Form 10G, should be completed accurately and submitted to the Income Tax Department.

What are the Benefits of 80G Registration?

  1. Incentive for Donors: One of the primary advantages of 80G registration is that it acts as an incentive for donors to contribute to registered NGOs. Donors can claim tax deductions for the amount donated to such NGOs, reducing their taxable income. This motivates individuals and businesses to contribute to social causes, knowing that their contributions will have a positive impact on society while also yielding tax benefits.
  2. Attracting Individual Donors: Registered NGOs with 80G certification are likely to witness an increase in donations from individual donors, as tax deductions make donations more appealing and financially viable for them. This can significantly augment the NGO’s funding base and allow them to undertake more extensive and impactful initiatives.
  3. Corporate Social Responsibility (CSR) Contributions: For businesses operating under the Corporate Social Responsibility (CSR) mandate, donating to 80G registered NGOs becomes an attractive option. Such donations not only fulfill their CSR obligations but also lead to tax savings, making the contributions more cost-effective and aligned with their philanthropic goals.

What are the Requirements for 80G Registration?

To avail of the benefits of 80G registration, NGOs must fulfill specific requirements set by the Income Tax Department. The key requirements include:

  1. Valid 12A Registration: To apply for 80G registration, an NGO must already have obtained 12A registration. 80G registration is an extension of 12A registration, making it a prerequisite for availing of the tax benefits provided to donors.
  2. Compliant Financial Records: The NGO must maintain accurate and transparent financial records, including audited financial statements, to demonstrate the proper utilization of donations and compliance with tax regulations.

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Application Process for 80G Registration:

The application process for 80G registration involves the following steps:

  1. Obtain Form 10G: The NGO should obtain Form 10G, the application form for 80G registration, from the Income Tax Department or download it from the official website.
  2. Complete Form 10G: The NGO must accurately fill out Form 10G with all required details, ensuring that the information matches the 12A registration certificate.
  3. Submit the Application: The completed Form 10G, along with supporting documents, should be submitted to the Income Tax Department or the designated authority.
  4. Verification and Approval: The Income Tax Department will review the application and conduct necessary verification. If all requirements are met, the NGO will be granted 80G registration, and the validity period of the certificate will be specified.

What are the consequences of not revalidating 80G and 12A registration?

  • Revalidation of 80G and 12A registration is crucial for NGOs to continue to enjoy the benefits of tax exemption. If an NGO fails to revalidate its registration, it will no longer be able to enjoy the existing benefits of 12A certificate for NGOs and 80G deduction .
  • Without revalidation, the charitable institutions cannot claim the benefits provided to them under 12A and 80G deductions .When an NGO loses the benefits of 12A registration, it will no longer continue to be a tax-exempt entity and will be taxed as an AOP (Association of Persons).
  • The revalidated registration under section 12A and/or 80G is valid for a period of five years, after which it needs to be revalidated again. Therefore, it is essential for NGOs to apply for revalidation of their existing 80G and 12A registration to continue to avail of the tax benefits and exemptions available to them.

 

12A and 80G registration can be a valuable asset for NGOs. By obtaining these registrations, NGOs can save money, attract donations, and increase their credibility. If you are an NGO, I encourage you to consider applying for 12A and 80G registration.

FAQs

What is the difference between 12A and 80G registration?

12A registration allows NGOs to obtain tax exemption on their income, while 80G registration allows donors to deduct the amount of their donation from their taxable income.

Which registration is better for NGOs?

Both 12A and 80G registration are beneficial for NGOs. However, 80G registration can be more beneficial for NGOs that are looking to attract donations from individuals and businesses.

How do I apply for 12A and 80G registration?

The application process for 12A and 80G registration varies from state to state. However, the general process is as follows:

  1. The NGO must submit an application form to the Income Tax Department.
  2. The Income Tax Department will review the application form and determine whether the NGO is eligible for registration.
  3. If the NGO is approved for registration, the Income Tax Department will issue a certificate of registration.

Where can I get more information about 12A and 80G registration?

The Income Tax Department website has a wealth of information about 12A and 80G registration. You can also contact the Income Tax Department for more information.

What is 12A and 80G form?

12A and 80G are sections of the Indian Income Tax Act that provide tax benefits to donors who make contributions to eligible non-profit organizations (NGOs). 12A registration allows NGOs to obtain tax exemption on their income, while 80G registration allows donors to deduct the amount of their donation from their taxable income.

What is 12A 80G income tax?

12A 80G income tax refers to the tax benefits that are available to donors who make contributions to eligible NGOs. These tax benefits can save donors a significant amount of money, which can encourage more people to donate to NGOs.

What is the 80G tax exemption?

The 80G tax exemption is a provision in the Indian Income Tax Act that allows donors to deduct the amount of their donation to eligible NGOs from their taxable income. This means that for every ₹100 that a donor donates to an eligible NGO, their taxable income will be reduced by ₹100.

How do I verify 12A 80G?

There are a few ways to verify 12A 80G. One way is to check the NGO’s website. Most NGOs will have a section on their website where they list their 12A and 80G registration numbers. Another way to verify 12A 80G is to contact the NGO directly. The NGO should be able to provide you with their 12A and 80G registration numbers, as well as other information about their tax-exempt status.

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