Why To Apply For 80G & 12A Registration
- NGO can avail income tax exemption by getting itself registered and fulfilling certain other formalities, but such registration does not provide any benefit to the person making donations.
- To provide income Tax benefits to the “donors”, all NGO’s must apply for 80G & 12A certification. If an NGO gets itself registered under section 80G & 12A then the person or the organization making a donation to the NGO will get a deduction of 50% of donation amount from taxable income.
- An NGO is applicable for government funding only, if it is registered under 80G & 12A.
- A newly registered NGO can also apply for 80G & 12AG registration.
- NGO does not have to pay tax for the entire lifetime if it gets registered under section 80G & 12A.
- An NGO can apply for 12A certification and 80G certifications just after the registration of an NGO.
- Decision: – Is an 80G certification required for your NGO to attract more donors.
Benefits of 80G Certificate & 12A Certificate:-
- Tax Benefits: – NGO can avail income tax exemption by getting 80G certificate
- Attract Donors: – If an NGO gets itself registered under section 80G & 12A then the person or the organization making a donation to the NGO will get a deduction of 50% of donation amount from taxable income
- Life time tax exemption: – NGO do not have to pay tax for the entire lifetime if it gets registered under section 12A
- Government Funding: – An NGO is applicable for government funding, if it is registered under 80G & 12A
Borrowing Capital Benefits of 80G & 12A Certificate
- It’s easy for an NGO to get funding if registered under 80G and 12A registration.
- If registration for 80G certification benefits & Liabilities satisfy your business requirement, then registration for 80G certification might best suit your NGO needs.
Eligibility for 80G & 12A Certification
- NGO income or assets should be exclusively for the purpose of charity.
- Proper books of accounts of the NGO should be maintained, including all receipts and expenditures.
- NGO should not be formed with the benefit of a particular religious, community or caste.
- NGO should have core objective of charitable purposes, and whole income should be from donations. If in case, NGO has a business income then the trustee of the NGO should maintain separate books of accounts to ensure that NGO should not divert donations.
Three Easy Steps to Apply for 80G & 12A Certification
80G Certificate Overview
80G Certificate is issued to a non-profit organization or a charitable trust or non-governmental organizations (NGO), or a Section 8 Company by the Income Tax Department. The intention behind issuing the 80G certificate is to promote 50% tax benefits to donors so that more and more donors can donate funds to these organizations.
80G Registration Procedure
- 80G certificate application will be submitted to the Commissioner of Income Tax.
- Once the applicant submits the form and the required documents for 80G registration, next step is on-the-premise inspection, which is to be completed by the Income Tax department. During inspection process, income tax department officials might ask for additional documents and evidence if required.
- On successful verification and scrutinizing of documents and evidences, the 80G certificate is awarded to the institution by the income tax Commissioner.
- 80G Certificate is valid for a lifetime period.
12A Certificate Overview
12A Registration Procedure
- The applicant needs to file application along with Form 10A, as per Rule 17A of the Income Tax Act, 1962, and submit it to the Commissioner of Income Tax.
- Once the applicant submits the form 10 A along with required documents for 12A registration, next step is income tax officer inspection. During inspection process, income tax department officials might ask for additional documents and evidence if required
- On successful verification and scrutinizing of documents and evidences, the 12A certificate is awarded to the institution by the income tax Commissioner.
- 12A Registration is valid for a lifetime period, unless NGO activities are against law.
Documents Required for 80G Certificate & 12A Registration
- A copy of PAN Card (NGO).
- Duly filled in Form – 10G.
- Trust Deed / MOU.
- List of donors along with their address and PAN.
- List of governing board of trustee’s members with their contact details.
- Original Registration Certificate.
- For Proposed Registered office (Residential or commercial)
- Any Utility bills
- Scan copy of Rent agreement with NOC from owner