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Income Tax Exemption-12A and 80G-Revised Procedure

Why is 12A and 80G registration required?

The purpose of an NGO is to serve certain charitable objectives. NGOs in India can be established in the form of a charitable trust, society, or section 8 company. Once this is done, it is eligible for a variety of tax exemptions and benefits while the donors can also claim certain deductions. As a result, it is essential that an NGO completes its 12A and 80G registrations with the income tax department. If it fails to do so, then any income and NGO makes, be it in the form of a donation or service, will be considered as taxable income.

What are the benefits?

  • More funds become available as organizations save via the tax exemptions.

  • NGOs become eligible for grants and funds from a number of different agencies including international organisations as per the Foreign Regulation Act.

  • It becomes easier to secure donations with the 12A and 80G registrations status as donors feel more comfortable knowing who they are giving their money to and for what purpose.

  • 12A and 80G are on time registrations which are valid for a period of 5 years.

  • 80G and 12A registrations are mandatory to get CSR Contribution.

Eligibility/Cancellation of registration

  • If the NGO is working on behalf of a religion, community, or caste, then it is not eligible for 12A and 80G status.

  • If the NGO receives funding or donations from political parties then it is not eligible.

  • If the NGO is found to be working towards a commercial interest or profit motive then its registration can be cancelled. If it is doing so, then it must maintain a separate book of accounts for its commercial gains which are to be taxed.

Required Documents

  • Copy of PAN Card

  • Certificate of incorporation of NGO

  • Trust deed or MOA or AOA

  • List of welfare activities

  • Duly filled in Form 10 A in the case of 12A registration

  • 3 years financial statements in the case of 12A registration

  • Address proof of registered office of NGO

  • Legal agreement or property papers of registered office

  • Utility bills

  • PAN details of donors

  • List of trustee members along with their contact details

12A Registration Procedure

Step 1 - Form 10 A must be filled online with all the relevant details provided as per rule 17A of the Income Tax Act, 1962.

Step 2 - The application will go through the verification process wherein in the commissioner will check the details and ask for additional information if needed.

Step 3 - Once the commissioner is satisfied that all the details are provided and are correct, provisional 12A certificate will be issued for the registered NGO.

80G Registration Procedure

Step 1 - Form 10 G must be filled in online with all the relevant details provided.

Step 2 - The relevant authority will verify the application to ensure that all the information is provided and and ask for additional details if needed.

Step 3 - Once the authority is satisfied with the information, they will approve the registration and grant a certificate to the NGO.

Time Line:

Usually 12A registration takes 1 month time. 80G Registration will take time upto 6 months.

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