12A and 80G Registration
12A Registration for NGO is a process in India for obtaining an exemption from income tax for a charitable trust, Society, or Section-8 Company. It is granted to trusts or societies or Section-8 Companies that operate for charitable purposes and meet the requirements set forth by the Income Tax Department. The registration is granted under section 12A of the Income Tax Act, 1961, and is necessary for a trust to be eligible for tax exemptions on its income. The benefits of 12A Registration Online include exemption from income tax on the trust, Society, or Section-8 Company income, the ability to apply for government grants, and the eligibility for tax-deductible donations from donors.
80G Registration for NGO certificate provided by the Income Tax Department of India to eligible Non-Governmental Organizations (NGOs) and charitable trusts. This registration certificate provides tax exemption to donors who donate to these organizations.
When a donor donates to an NGO registered under 80G, they can claim a tax deduction on their donated amount while filing their Income Tax returns. This tax benefit acts as an incentive for donors to donate generously to NGOs and helps in fundraising for the NGO. Moreover, 80G Registration adds credibility to the NGO and helps in atracting more donors. Many corporate companies and individuals prefer to donate to registered NGOs to avail of tax benefits, and this, in turn, helps NGOs to raise more funds for their projects and
activities.
- More capital allowed for charitable activities through tax exemption over NGO income.
- Funds and Grants are permitted from recognized Agencies, Government and International sources.
- ONLY 12A and 80G registered NGOs are permitted to accept International funding with exemptions available under Foreign Regulation Act, 2010 or FCRA.
- Attracts more donors expanding the scope of fulfilling the NGO objectives.
- More operational exposure and status value when the NGO is registered and obtains 12A and 80G registration.
- Both 12A and 80G are one-time registrations and valid for an NGO’s lifetime.
Eligibility for 12A and 80G Registrations
- NGOs working as Public Charitable Trust or u/s 25 of the Companies Act, 1956 working ONLY for the public welfare are allowed for this provision.
- Donation as permitted u/s 80G is allowed for tax exemption
- NGO assets should ONLY be used for charitable purposes.
- NGOs should correctly maintain Books of Account of its expenditures and receipts.
NGO 80G registration can be cancelled in these cases:
- If NGO runs the promotion/benefit of religion/community/caste.
- If NGO receives funds/gifts from Political Parties/International sources.
- In case, NGO works as a commercial profit based unit.
- NO NGO member is permitted for making commercial profit based earning under NGO’s operational activities. In case, such income is received, it should be separated from NGO income. There should be separate Books of Accounts for such income.
- ANY misuse of the 80G provisions can result in the cancellation of this certificate.
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