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 the manager of its fund or the proud founder of a large donor. This article sheds light on why NGO registration under 12A and 80G is available in India and is important for tax exemption. Today we will learn about 80G and 12A in detail.
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What are the benefits of Registration under Section 12A?
What is the Registration Process for Section 12A of Income Tax?
What are the benefits of Registration under Section 80G?
What is the Registration Process for Section 80G of Income Tax?
The issue of a certificate under Section 80G of the Income Tax Act
How to Register an NGO?
12A registration is an exemption taken by most trusts at one time, including incorporation after the exemption from the inclusion of income tax. 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 be aware of Section 12A of the Income Tax Act and get it soon after incorporating the trust or NGO. In this article, we look at the process of 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 on the basis of registration, trusts and 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 as per usual rates. Section 12A of the IT Act, 1962 does not separate between charitable & religious trusts. Hence the 12A registration applies to both characters of organizations.
Here we are mentioned the essential documents required for 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.
80G Registration under Section 80G of the Income Tax Act provides benefits to the donor of an NGO. The donor gets financial benefits in his taxable amount of their income. The 80G certificate is issued by the Income Tax Department to a non-governmental organization (NGO), a charitable trust, or a section 8 company. The 80G certificate is issued by the Income Tax Department to an NGO, a charitable trust, or a section 8 company. The 80G certificate is given to support such 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 gross total income. Additionally, to avail of the exemption, the donor will have to attach a stamped receipt of the donation made. Such receipt should include the name of the donor, donation date, and PAN of the organization.
Here we are mentioned the required documents for 80G registration, let’s have a look.
The prior requirement for getting registration under section 80G is obtained registration under Section 12A.
80G Registration Procedure Consists Of The Following Steps:
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. To avail of the deduction, the payment shall be made as defined under the law.
The registration procedure may take time up to 3 to 4 months.
The process of registration 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 are these three acts?
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 office. To register an NGO under the Trust Act, you need a document called a deed.
Registration under the Act requires a Memorandum of Association and Rules & Regulations document, this document is very important. A minimum of 7 members is required to create this document. NGOs are registered as societies, but in the state of Maharashtra, NGOs can be registered as trustees in some states such as the Societies Act.
MOA & AOA and regulation documents are needed for the registration of an NGO under the Companies Act. No stamp paper of some kind is required to build this document, a minimum of three members are required to create this document.
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