NGOs often depend on donations for their functioning and service, but did you know there’s a system in place to ensure that 100% of those donations can be exempted from taxation? Here’s how an NGO can get those exemptions...
How to get 80g certificate for NGO? Did your passion for a good cause lead you to incorporate an NGO? Are you wondering about how you can keep the taxman from eating into your donations? You Can Know more about 12A & 80G Certificate in this blog!
Look no further, as Section 12A and 80G of the Income Tax Act are here to the rescue! Continue reading to discover more about Section 80G and NGO registration under Section 12A. NGOs can obtain 12A & 80G Certificate to enable tax exemption for donors and access government funding.
What Does 80G and 12A Registration Mean for an NGO?
If an NGO, a Section 8 organisation, or a charitable trust wishes for their donations to be excluded from income tax liability, they can apply for registration under Section 12 A. A registration under section 80G of the Income Tax Act, on the other hand, gives tax benefits (80G deduction) to an NGO’s donor. On the flip side, the receipts of the NGO and the donation made by sponsors would be subject to regular tax rates if the NGO does not have a 12A and 80G certificate.
Your NGO may apply for both the 12A certificate and Section 80G registration at the same time or separately. However, you must first register for 12A certification if you want to apply for them separately. This is because, to register under 80G, an NGO must have already acquired certification under Section 12A.
Benefits of the 12A Certificate for NGOs
- The income of an NGO shall be deemed exempt from taxes
- NGOs will become eligible to apply for grants from any domestic and international governmental agency
- Furthermore, NGOs can also avail the benefits under FCRA registration.
- Business income must not be generated by them
- Charitable trusts or registered societies should be used
What Are the Benefits of Section 80G Registration for NGOs?
On acquiring certification under Section 80G, all eligible donations made to the NGO become qualified for a deduction from the taxpayer’s taxable income. This benefits the NGO as donors and sponsors are incentivized to donate not only in terms of goodwill but also from a monetary perspective. In a way, it is like rewarding your sponsors for their support. Registering your NGO under 80G not only helps you draw in more donations from new donors but also simultaneously helps you ensure the loyalty of your regular donors.
Documents Required for NGO Registration Under Section 80G and 12A in India
For NGO registration under 80G and 12A, the following documents are required:
- Duly filled Form – 10A for NGO Registration u/s 12A
- Duly filled Form – 10G for registration u/s 80G
- Copy of PAN card in the name of the NGO
- NGO DARPAN ID
- Landlord’s NOC
- Self-attested copies of the MOA /trust deed and certificate of registration (two copies each)
- Copy of utility bill (electricity bill/house tax receipt/water bill)
- Proof of welfare activities undertaken
- Progress report for the last 3 years or since inception
- Balance sheet, ITR, and books of accounts for the last 3 years or since inception
- List of the governing body members and their contact details
- List of the donors along with their PAN and address
- Any other undertaking/document/affidavit/information may be required by the authorities.
How Can Vakilsearch Assist You with Obtaining Your 12A and 80G Registration Certificates?
Let’s be honest: as a social entrepreneur, you don’t have time to go back and forth between your social work and the Commissioner of Income Tax’s office. Even if you do, we can both agree that it is far better spent on a worthwhile cause that will make a real difference in the world. That’s where we come in.
Vakilsearch professionals will take care of everything, from gathering the necessary papers to completing the forms. Additionally, submitting them to the office of the Principal Commissioner or Commissioner of Income Tax in the jurisdiction where your NGO operates.
We make sure that the application is accompanied by the right form as well as the prescribed documents. We will also ensure that the application passes the Principal Commissioner or Commissioner’s scrutiny regarding the validity of the application and the documents submitted. Further, we work swiftly and efficiently to ensure that the application for the NGOs registration under Section 12A and 80G passes all the checkpoints in place.
In light of this discussion, it’s also worth noting that every order granting (or refusing) NGO registration must be issued within 6 months of the month in which the application was received. If an NGO registration application is not submitted within this time frame, the registration is deemed approved.
Remember to Register Your NGO with Darpan.
The Indian government: https://www.india.gov.in/ has created a digitised database for all NGOs, trusts, and societies operating in India. Moreover, if an NGO wants to receive government funding, grants, or avail of the benefit under any government scheme, it must first register with the Niti Aayog. To that end, the registration must be completed on the Niti Aayog’s NGO Darpan portal.
With the help of Vakilsearch, you can get your NGO Darpan Registration done in a hassle-free and delay-free manner, all you have to do is get in touch with our team. Our dedicated legal experts will be in constant touch with you, right from the get-go. They spare no time in collecting all the documents required for registration from you.
They will also help you put together those documents that you don’t have handy. Further, they will then proceed to apply for registration on your behalf. Not only this, our team can immediately file for 12A registration and 80G deduction as well.
You only have to worry about fighting the good fight and making the world a better place! We’ll take care of the rest by ensuring you receive your registration certificates in just a couple of days!
Frequently Asked Questions
What is the cost of 12A and 80G registration?
The combined fees for 12A and 80G registration amount may vary. For more details get in touch with Vakilsearch. Registration applications are typically processed within 5-10 days, with approval from the Jurisdictional Principal Commissioner taking around 20-30 days.
Can we apply for 12A and 80G together?
Yes, you can apply for registration under Sections 80G and 12A either concurrently or independently.
Is 80G tax exempt from 12A?
No, donations eligible for 80G tax exemption are not automatically exempt from 12A. While 80G pertains to donations made to specific charitable organisations, 12A relates to the general tax exemption status of charitable institutions. Each provision operates independently, requiring separate qualifications for tax benefits.
What is the validity period of 12A and 80G registration?
The provisional registration remains valid for six months before expiry or within six months from the commencement of activities, whichever comes first. Following this, application for permanent registration is required. Permanent registration remains valid for five years until renewal of 80G and 12A registration is completed.
How to apply 12A and 80G online?
Please send the completed Form 10A and required documents to either the Office of the Income Tax Commissioner or via the Income Tax Website. This step officially starts your 12A/80G registration process. Remember to retain copies of all documents submitted for your records.
What is the limit of 12A registration?
The limit for 12A registration refers to the maximum number of registrations permissible under this category. Organisations seeking 12A registration must adhere to this limit, which may vary depending on regulatory guidelines. It denotes the ceiling for entities to qualify for tax exemption under Section 12A of the Income Tax Act.
Who is eligible for 80G?
Deductions under Section 80G of the Income Tax Act can be claimed by both companies and individuals, for donations made to eligible charitable institutions or funds.
How do I register my NGO under 80G?
The process of obtaining 80G registration involves submitting Form 10G along with necessary documents to the Jurisdictional Principal Commissioner or Income Tax Commissioner (Exemptions). Upon receiving the application, the Commissioner assesses the authenticity of the NGO's activities by verifying the submitted documents.
What is the limit of 80G donation?
The maximum deductible amount permitted by Section 80G is 50% of the lesser of either the donated sum (₹90,000) or the qualifying limit (₹75,000). In this instance, the qualifying limit of ₹75,000 determines the lower amount.
