How to Start a 12A and 80G Registration

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What is 80G Certificate?

80G Certificate is issued under Income Tax Act, 1961 to NGO’s by Income Tax Department.

The primary objective behind the grant of 80G Registration is to motivate more donors to the organizations for donating funds.

Furthermore, the donors receive a 50% tax exemption on his total taxable income. To avail this exemption, the donor must attach the stamped receipt against the donation issued by the NGO.

What is 12A Registration?

12A Registration is the most initial step NGO’s need to follow to seek a Certificate of Exemption from Income Tax Department.

Companies registered under Section 12A doesn’t need to pay income tax as they are exempted from it.

Furthermore, 12A Certificate helps you to seek permission from the government and the organizations abroad as 12A Registration acts as a legitimate proof of your NGO’s existence.

Significance of 12A and 80G Registration

12A and 80G Registration are recommendable for all NGOs, whether it is a Trust, Society or a Section 8 Company.

NGO with 12A Registration can claim a complete exemption from Income Tax Department. However, those with 80G Certification get the advantage of attracting more donors to the organization for donating funds.

Being an NGO, you don’t obtain such Registrations; then you will be subject to regular tax rates. Furthermore, attracting donors for donations become arduous.

Benefits of obtaining Registration under Section 12A and 80G of Income Tax Act, 1961

Both Sections 12A and 80G have their own significance and offer several benefits to NGO’s with such Registrations. The advantages are as follows:

  • Only NGO’s who possess Registration under Section 12A and 80G are worthy of availing government funding.
  • With 80G Registration, NGO’s can allure donors to donate funds to the organization.
  • Using this Registration, the donors can lessen the donation amount to the NGO from their total taxable income.
  • Registration under Section 12A helps the organizations to seek grants from government & organizations abroad.

Documents required for 80G Registration

Documents for 80G Registration

To obtain 80G Certificate, you need to provide the following documents:

  • PAN card of NGO;
  • Form 10G;
  • Certificate of Incorporation;
  • Memorandum of Association, if NGO is registered under Society or Section 8;
  • Trust Deed, in case the NGO is a Trust;
  • Copy of utility bills such as Water Bills, Electricity Bills or House Tax Receipt;
  • NOC (No-Objection Certificate) from the property owner, if the office is located on a rented property;
  • List of Board of Trustees;
  • List of donors along with their PAN and complete address;
  • A complete list of welfare activities

Documents required to obtain 12A Certificate

Documents for 12A Certification
  • Form 10A;
  • Financial statements of the consecutive three years;
  • PAN card of the organization;
  • Certificate of Incorporation;
  • Trust deed, if NGO is a Trust;
  • Memorandum of Association;
  • Articles of Association of the Company.

Procedure for 80G Registration

Process of 80G Registration

Certificate of 80G Registration can be obtained in the four simple steps as follows:

  • Step 1: 

    Submit the Application for 80G Registration to Commissioner of Income Tax Department in the concerned jurisdictional area of the organization.

  • Step 2: 

    Once you have submitted all the documents and an Application, Income Tax Department will inspect them carefully.

  • Step 3: 

    If the officials need any more information, they will ask you for additional documents. You need to submit those documents within the prescribed time.

  • Step 4: 

    If the department is satisfied with the verification of the documents and the information provided, Commissioner will issue 80G Certification to the organization.

Registration Process to obtain 12A Certificate

Process of 12A Certificate

One can obtain 12A Certificate by following the steps described below:

  • Step 1: 

    As per Rule 17A of Income Tax Act, 1961, the applicant needs to file Form 10A with the Jurisdictional Commissioner of the Income Tax Department.

  • Step 2:

    The Commissioner will verify the Application along with the attached documents to check the authenticity of the information provided. If something is missing, he will ask for additional documents.

  • Step 3: 

    If the Commissioner is satisfied with the report, he will issue Certificate of 12A Registration. However, if he doesn’t find the documents and Application relevant, then he will reject the Application.

Validity period

80G and 12A Certificates have validity for the lifetime.

FAQs of 12A and 80G Registration

The term “Section 80G Certificate” denotes the certificate issued by the Income Tax Department to the NGO, Section 8 Company, or Trust.

The Qualifying Limit for Section 80G is 10% of the Adjusted Gross Total Income.

The features of Section 80G are Donation in Real Money; Deduction available on Gifts; and Stamped Receipt is given to the Trust.

The term “Section 12A Certificate” denotes a registration obtained by the NGO for availing Tax Exemption from the Income Tax Department.

An NGO with 12A Registration is eligible to claim a complete Tax Exemption from Income Tax Department.

The documents required are Form 10A; Financial Statements for the last 3 years; PAN Card; Certificate of Incorporation; Trust Deed (in case of Trust); Memorandum of Association; MOA and AOA.

The main difference between the both is that the former assist an NGO in getting Tax Exemption from the IT Department. In contrast, the latter offers benefit to the Donor of an NGO.

One can apply for the registration under Section 80G and Section 12A by visiting the official website of the Income Tax Department.

One can avail of from 50% to 100% tax deduction from the Income Tax Department without restriction.

One can calculate the deduction by subtracting the limit provided from the Gross Total Income.

One can avail of from 50% to 100% tax deduction from the Income Tax Department without restriction.

One can submit the proof for Section 80G either by submitting the same to the employer or by filing an annual return.

No, the provisions of TDS are not applicable to Donations.

A Trust can accept up to Rs 2000 in cash as Donation.

A Trust can accept deposit above Rs 2000 but in any form other than Cash.

Under section 80G, the Income Tax Department allows the taxpayer to get relief by deducting the donations made to the charitable institutions from the Gross Total Income.

Both NGOs and Charitable Institutions can apply for registration under section 12 A.

No, an individual cannot claim an exemption under section 80G for the donations made to Foreign Trusts.

The main difference between the both is that the former provides the process of registration under Section 12A. In contrast, the latter provides for the applicability of sections 11 and 12.

One can apply for the registration under Section 80G and Section 12A by visiting the official website of the Income Tax Department.

Yes, one can apply for Registration under Section 80G and 12A in both ways, i.e., together or separately.

The Registration under Section 80G has lifetime validity.

The Registration under Section 12A has lifetime validity.

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