12A and 80G Registration for NGO: Process, Benefits, Document, Eligibility

Non-governmental organizations in India are registered for many reasons and are also beneficial. Income tax exemption is available under its two major certificates – 80G and 12A. The objective of this article is that non-governmental organizations will know the owners in simple terms.

If you are associated with an NGO, you are its fund manager or the proud founder of a significant donor. This article clarifies why NGO registration under 12A and 80G is available in India and is essential for tax exemption. Today we will learn about 80G and 12A in detail.

12A Registration

12A registration is an exemption taken by most trusts at one time, including incorporation after the exemption from income tax inclusion. Section 8 Companies, trusts and NGOs that have 12A registration enjoy an exemption from paying income tax on the surplus income of the Trust or NGO. Income tax exemption is available to all non-profit or non-governmental organizations. Therefore, all trusts, NGOs and other non-profit organizations should know Section 12A of the Income Tax Act and get it soon after incorporating the trust or NGO. In this article, we look at obtaining 12A registration in India.

Now that we’ve included 80G registration, we’ll discuss 12A registration and the 12A registration process.

12A is exempt from paying income tax based on registration, trusts, NGOs, and other Section 8 companies. NGOs are organizations for charitable and non-profit activities. However, they have income, and if not registered under Section 12A of the Income Tax Act, they will have to pay tax at the usual rates. Section 12A of the IT Act, 1962 does not separate charitable & religious trusts. Hence the 12A registration applies to both characters of organizations.

Benefits of Registration under Section 12A?

• Income will be exempted from taxation.
• An organisation registered under section 12A becomes eligible to receive government, Abroad and various private sector grants.
• Benefits of FCRA Registration.
• Organizations registered under 12A are also eligible for availing of benefits under section 80G.

Registration Process for Section 12A of Income Tax?

Eligibility

• Charitable Trusts, Religious Trusts, Societies, and Section 8 Companies
• Not applicable to the Private or Family Trust.

Documents Required for 12A :-

Here we have mentioned the essential documents required for 12A Registration:

• Documental confirmation of the creation of the Trust or NGO {Trust Deed of a Trust; Registration Certificate and MOA of a society}
• Section 8 companies require to submit a certificate of incorporation and copies of the MoA and AoA of the company.
• Form 10A.
• Three-year bank account statement of the Trust.
• PAN of the organization.

Read also: What is NGOization

Process of 12A Registration :–

It is a one-time registration process. Before applying for an exemption certificate under section 12A, the NGO shall get its NGO registered under the Income Tax.

• The application shall be made in Form 10A to the Income Tax Commissioner.
• The application shall contain the following documents:
  • List of name, address and Pan details of the trustees/managers;
  • A true certified copy of the instrument (registration certificate) under which the trust/institution was created/established;
  • A true certified copy of the document (Trust deed/MOA and AOA) which is evidence of such institution/trust creation;
  • Copy of PAN card of NGO.

Section 12A and 80G Registration (Package Offered)

80 Registration

80G Registration under Section 80G of the Income Tax Act provides benefits to the donor of an NGO. The donor gets financial benefits in the taxable amount of their income. The Income Tax Department issued the 80G certificate to a non-governmental organization (NGO), a charitable trust, or a section 8. The Income Tax Department issued the 80G certificate to an NGO, a charitable trust, or a section 8 company. The 80G certificate is given to support non-profit organizations to donate money. In addition, the donor receives a tax rebate of 50% on donating to such an organization, as they become eligible to withdraw such amount from their total gross income. Additionally, the donor will have to attach a stamped receipt of the donation to avail of the exemption. Such receipt should include the name of the donor, donation date, and PAN of the organization.

Benefits of Registration under Section 80G?

• A donor can avail deduction from their taxable income.
• Attracts the donor to donate.
• Getting an 80G Registration also facilitates seeking foreign contributions.
• Only an NGO with 12A and 80G registration is eligible for government funding.
• As a society by law, 80G registration gives your NGO a promising prospect, enhancing its goodwill and the confidence of those associated with your brand.

Eligibility for Section 80G of Income Tax?

• Donations made to charities are prescribed under category 80G.
• The NGO shall be duly registered under the Act.

Who are not eligible for registration under 80G Certification:

• The charities with a religious or business angle.
• Nonseparation of Business and Charity account if the charity is involved in any business which does not account for donation alone.
• Tax benefits are not available to a donor donating to an NGO that is not registered under 80G or funding for a political party, or gifts made to trusts outside India.

Documents Required for 80G :-

Here we have mentioned the required documents for 80G registration; let’s look.

• MoA and Registration certificate in case of Section 8 companies and Societies and a Trust Deed in case of a Trust
• No objection certificate from the owner of the property where the registered office of the Institution is situated
• Form 10G
• A copy of the PAN of the NGO
• Copy of Utility Bills such as electricity bills, water bills or House Tax Receipt
• A list of the donors, along with their addresses and PAN
• Documents related to income tax returns and the book of accounts for the past three years
• The list of the welfare activities staying carried out and the progress report for the last 3 years
• The detailed list of the Board of Trustees and the original RC, MoA, or Trust Deed.

Read also: Top 10 NGOs in India

Process of 80G Registration:

The prior requirement for getting registration under section 80G is obtaining registration under Section 12A.

80G Registration Procedure Consists Of The Following Steps:

• Apply for an 80G certificate to the Commissioner of Income Tax (Exemption) within the jurisdictional area of the entity, along with the required documents.
• The Income Tax department does an on-premise inspection after submitting the form and the required documents for 80G registration.
• However, the Income Tax Officials might ask for additional documents or evidence if they seem unfit or feel anything is missing.
• Upon satisfactory verification of documents and the office of the NGO, an 80G certificate is granted to the institution by the Commissioner.

Section 12A and 80G Registration (Work Procedure)

The issue of a certificate under Section 80G of the Income Tax Act:

On receipt of an application, the Commissioner Scrutinize and may request further documents or information. After the satisfaction of an application, the commissioner may pass an order in writing registering the Trust or Institution under Section 80G of the Income Tax Act. On non-satisfaction of an application, the commissioner may deny the application of an NGO. The payment shall be made as defined under the law to avail of the deduction.

The registration procedure may take time up to 3 to 4 months.

How to Register an NGO?

The registration process of an NGO in India is done in three ways. Or we can also say that NGOs can be registered in any of the three Acts. Let us know what these three acts are?

• Trust Act
• Society Act
• Companies Act

Trust Act

There are Trust Acts in various states of India, but if a state does not have a Trust Act, then the 1882 Trust Act applies in that state. It is necessary to have at least two trustees under this act. To register an NGO under this Act, you have to apply to the charity commissioner or registrar’s office. To register an NGO under the Trust Act, you need a document called a deed.

Society Act

NGOs are registered as societies, but NGOs can be registered as trustees in some states, such as the Societies Act in Maharashtra. Registration under the Act requires a Memorandum of Association and Rules & Regulations document; this document is essential. A minimum of 7 members is needed to create this document.,

Section 8 Company Act

MOA & AOA and regulation documents are needed for the registration of an NGO under the Companies Act. No stamp paper is required to build this document; a minimum of three members are required to create this document.

Frequently Asked Questions

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