Apply Online for 12A and 80G Registration

In India, non-profit organisations can benefit significantly from two specific registrations provided by the Income Tax Department: 12A and 80G. The 12A registration grants non-profit organizations an exemption from paying income tax on their earned income, which can greatly aid in maximising the funds available for their charitable activities. Additionally, the 80G registration offers a substantial benefit to the donors of these organisations, allowing them to claim deductions on their taxable income for any donations made.

At IndiaFilings, we understand the importance of obtaining Section 12A and 80G registrations for your non-profit organisation. We offer comprehensive assistance and guidance throughout the registration process to help you get the benefits and privileges provided under these sections of the Income Tax Act.

Contact our experts today to get Section 12A and 80G registrations easily!

What is 12A & 80g Registration?

12A and 80G registrations are critical tax provisions for NGOs in India, enabling charitable institutions to avail themselves of specific tax exemptions and benefits. These exemptions are governed by Sections 12A/12AA and 80G of the Income Tax Act of 1961:

12A Registration

This certification is provided under the Income Tax Act 1961 to non-profit organisations in India. Once registered under Section 12A, an NGO becomes eligible for tax exemption on its income, meaning it doesn’t have to pay tax on surplus funds generated through grants, donations, or other revenue as long as these funds are used for charitable purposes. This registration is crucial for NGOs as it helps in maximising the funds available for their activities.

80G Registration

While 12A registration benefits the NGO, 80G registration is intended to incentivise donors. It allows individuals or entities who donate to a 12A-registered NGO to claim a deduction on their income tax. This deduction is a percentage of the amount donated and can significantly reduce the donor's taxable income. The purpose of this provision is to encourage more donations by providing financial benefits to donors.

Both registrations enhance NGOs' ability to attract contributions by offering fiscal advantages to both the organisations and their benefactors.

Who can apply for 12A and 80G registration?

The following types of organisations are eligible to apply for 12A 80G registration,

• Charitable Trusts: Organizations established for charitable purposes.

• Registered Societies: Societies that are formally registered under the Societies Registration Act or similar state laws.

• Section 8 Companies: Companies formed under Section 8 of the Companies Act 2013 specifically for promoting charitable activities.

• Religious Organizations: Groups that primarily focus on religious activities and charitable work.

• Educational Institutions: Non-profit schools, colleges, and educational foundations.

• Medical Institutions: Non-profit hospitals and medical research organisations

Eligibility Criteria for 12A 80G Registration

To be eligible for Section 12A/80g registration, organisations need to meet specific requirements set by the Income Tax Department:

12A Registration Eligibility Criteria 

This section pertains to registering charitable or religious NGOs, enabling them to enjoy tax exemptions on income derived from donations. To qualify for Section 12A registration, an organisation must meet the following criteria:

• Nature of the Organization: Applicable to trusts, societies, or Section 8 companies that are established solely for charitable or religious purposes as defined under Section 2(15) of the Income Tax Act. This includes activities like poverty relief, education, medical relief, environmental preservation, and more.

• Charitable Activities: The organization must actively engage in its stated philanthropic objectives without any profit motives benefiting specific individuals or groups.

• Registration Proof: Must be duly registered as a trust, a society, or a Section 8 company under the relevant laws, with proof required during the application process.

• Income Utilization: All income and assets must be exclusively used for charitable or religious purposes, without any direct or indirect benefit to members or specific individuals.

• Financial Documentation: Proper bookkeeping and documentation must be maintained to reflect accurate financial operations.

• Tax Compliance: Annual tax returns must be filed on time, even with exempt status, to maintain this exemption.

• Political Neutrality: The organisation should not participate in or support political activities, as this can result in the revocation of the 12A status.

80G Registration Eligibility Criteria

This allows donors to claim tax deductions on donations made to eligible non-profit organizations. Eligibility for Section 80G registration includes:

• Nature of Organisation: Must be a non-profit operating as a registered trust, society, or Section 8 company focused on charitable or religious purposes, serving the public interest.

• 12A Registration Requirement: Organizations must already be exempt under Sections 11 and 12, evidenced by a 12A registration.

• Restrictions on Usage of Income: The governing documents must strictly limit the use of funds to charitable purposes only.

• Inclusivity of Beneficiaries: The benefits of the organization should not be restricted to any particular religious community or caste, ensuring a wider societal benefit.

• Regular Accounting: Accurate and regular financial records must be kept to provide transparency and accountability.

Additional Notes:

• Religious Trusts: 12A registration is suitable only for public religious trusts, not for those serving private religious functions.
• Scope of Public Utility Activities: These should not involve commercial activities unless they support the organization's charitable purpose, with such income not exceeding 20% of total receipts in the previous year.

Benefits of 12A and 80G Registrations

The benefits of obtaining 80G and 12A registrations for charitable organizations and NGOs are substantial, impacting various aspects of their operations:

• Tax Exemptions for Donors: NGOs with 80G certification can offer their donors the advantage of tax deductions on their contributions. This makes donating more attractive and can lead to increased support.

• Enhanced Credibility and Trust: Being registered under Section 12A and 80G lends an official stamp of approval from the Income Tax Department, enhancing an NGO's credibility. This trust factor is crucial for donors and partners who seek transparency in operations.

• Increased Fundraising Potential: The tax benefits associated with these registrations encourage both individuals and corporate entities to donate more generously. This broadens the potential fundraising base, allowing NGOs to expand their activities and reach.

• Access to Government Grants: Many government programs and initiatives require NGOs to have 12A and 80G registrations to qualify for funding. This opens up numerous opportunities for grants that are critical for project financing and operations.

• Long-Term Sustainability: The ability to offer tax benefits to donors not only boosts immediate donations but also helps in building long-term partnerships, ensuring sustainable funding sources. This stability allows NGOs to plan and execute impactful, long-term projects.

• Efficient Utilization of Resources: With 12A registration, NGOs must maintain meticulous records and use their funds strictly for charitable purposes. This ensures that resources are used effectively and for the intended goals of the organisation.

Overall, 12A and 80G registrations not only help in managing and expanding financial resources through tax benefits but also play a vital role in building organizational reputation and operational capacity.

Validity of 12A and 80G Registration

The validity of  Sections 12A and 80G registration initially starts with a provisional registration that lasts for three years. To extend this provisional status, organizations must apply for renewal either six months prior to the expiration date or within six months from the start of their operations, depending on which comes first. Once renewed, the registrations are valid for a subsequent period of five years. This cycle repeats every five years to continue enjoying the benefits.

12A and 80G Registration Documents Required

For NGOs to successfully complete the online registration process for 12A and 80G, they must provide a comprehensive set of documents that verify their legal registration. Failure to provide these documents could result in the application being considered incomplete and subsequently rejected by the authorities. Below is a detailed list of documents required for 12A and 80G registrations in India.

Here's the list of documents required for 12A and 80G registration:

• Trust Deed/Society Registration Certificate/Section 8 Company Certificate

• Memorandum of Association and Articles of Association (for Section 8 companies only)

• PAN card of the organization

• Bank account statement of the organization

• Audited accounts of the organization for the last three years

• List of trustees/members/directors of the organization

• List of activities carried out by the organization

12A and 80G Registration Process Online

Under the Finance Acts of 2020 and 2021, Form 10A is now mandated for registrations under Sections 12A and 80G of the Income Tax Act. We have outlined the revised registration process for 12A and 80G online in a detailed step-by-step guide below.  

Note: The earlier provisions under Section 12AA have been superseded by Section 12AB. Therefore, every NGO that was registered under Sections 12A, 12AA, or 80G must now re-register under Section 12AB, effective from April 1, 2021.

Step-1: NGO Formation and Registration

First, choose the appropriate legal structure for your NGO—trust, society, or Section 8 company—based on state regulations. After selecting the structure, officially register your organization with the appropriate authority, such as the Registrar of Societies or Companies.

IndiaFilings can help you register your society, NGO, or Section 8 company. Our experts are here to assist you every step of the way.

Step 2:  Document Preparation

Gather critical documents needed to apply for 80G and 12A registration using Form 10A. These include your organization's registration certificate, MOA/Bye Laws/Trust Deed, audited financial statements, FCRA Registration, and NGO Darpan ID, among others. These documents will verify your NGO's legitimacy and existence.

Step-3: Application Preparation 

Fill out Form 10A, the official form for 12A & 80G registrations, available from the Income Tax Department’s website or local offices. Ensure that all details about your organization's objectives, activities, and board members are accurately and thoroughly provided.

Step-4: Application Submission 

Submit Form 10A along with the required documents at the Office of the Income Tax Commissioner or through the Income Tax Website. This submission begins the formal registration process for 12A/80G. Keep copies of all submitted documents for future reference.

Step-5: Review and Inspection 

The tax authority will review your application and may inspect your NGO’s activities and financial records to ensure they meet the registration requirements for Sections 12A/80G.

Step-6: Registration Confirmation

If your application is successful and complies with the necessary standards, your NGO will be granted registration under Sections 12A/80G. Conversely, if any discrepancies are found, your application may be rejected, but you will have the opportunity to address the issues raised.

Step-7: 12A & 80G Registration Certificate  

Once registered successfully, you will receive an official 12& 80g  Registration certificate, affirming your NGO’s eligibility for tax exemption under Sections 12A& 80G. This certificate is vital for confirming your organization's legal status and enabling tax benefits for both the NGO and its donors.

IndiaFilings: Your Partner for Seamless 12A and 80G Registration!

IndiaFilings offers expert assistance in securing both 12A and 80G registrations. Our experts guide organisations through the intricate registration processes, ensuring compliance with all requirements. Whether the initial 80G and 12A registration registration or renewal, IndiaFilings provides comprehensive support, streamlining the application process and helping organisations achieve their charitable goals while maximising tax benefits.

Get started today to enjoy tax benefits while supporting your charitable endeavours.