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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.

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.

Documents required 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

Procedure for 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.

Validity period

80G Certificates have validity for the lifetime.

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.

Documents required to obtain 12A Certificate

  • 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.

Registration process to obtain 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

12A Certificate has lifetime validity.

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