Apply Online for 12A and 80G Registration

To benefit from tax advantages, NGOs should obtain 12A and 80G registrations. These registrations are the key to ensuring tax exemption for nonprofit organizations and attracting donors looking for tax incentives. Following forming a Trust or NGO, obtaining registration under Section 12A of the Income Tax Act is crucial for exempting exemptions under Sections 11 and 12. This registration empowers nonprofit entities to benefit from full tax exemption. Without 12A registration, the financial activities and income of a nonprofit trust or NGO become subject to taxation. Additionally, 80G registration, established under the Income Tax Act of 1961, allows donors to claim tax deductions for contributions to eligible charitable entities. This registration benefits both donors, who can deduct their donations from their income tax returns, and the registered charitable organisations, which can receive tax-deductible donations.

At IndiaFilings, we understand the importance of obtaining Section 12A and 80G registrations for your 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!

12A Registration

Following forming a Trust or NGO, obtaining registration under Section 12A of the Income Tax Act is crucial for exempting exemptions under Sections 11 and 12. This registration empowers nonprofit entities like Charitable Trusts, Nonprofit Organizations, Welfare Societies, and Religious Institutions to benefit from full tax exemption following the provisions of the Income Tax Act of 1961.

Without 12A registration, the financial activities and income of a nonprofit trust or NGO become subject to taxation. It should be highlighted that exemptions under this section do not apply to private or family trusts, which are therefore ineligible for 12A Registration.

Benefits of 12A Registration for NGOs

Use of Income for Charitable Activities: When a nonprofit uses its funds for charitable or religious activities, these expenses are deducted from its taxable income, lowering its tax obligations.

• Tax-Free Income: Organizations with 12A Registration don't pay income tax, allowing them to dedicate more funds to their missions.
• Saving for the Future: Registered nonprofits can save a portion of their income for future projects, with a cap of 15% for charitable use, without tax penalties.
• Income Not Counted in Taxes: Money set aside for future use or spent on charitable activities is not taxed, reducing the organisation's overall tax liability.
• Eligibility for Grants: Having 12A Registration makes nonprofits more attractive to local and international donors, opening up more funding opportunities.
• Permanent Registration: Once obtained, 12A Registration doesn't expire or need renewal, providing long-term stability.
• Flexibility in Benefits: Nonprofits can use the benefits of 12A Registration as needed, offering flexibility to adapt to changing circumstances.

Overall, 12A Registration equips nonprofits with financial advantages and stability, enhancing their capacity to fulfill their charitable goals.

Who Can Apply for Section 12A Registration?

The following types of entities can apply for Section 12A registration to enjoy tax benefits and support their charitable missions.

• Trusts: Public trusts focused on charity or religion, including various other trust types aiming for charitable or religious goals
• Institutions: This category includes charitable or religious institutions like schools, hospitals, and similar entities.
• NGOs: Nonprofit organisations working towards social welfare, environmental conservation, or similar charitable.
• Societies: Societies involved in charitable or religious work, registered under the Societies Registration Act of 1860.
• Section 8 Companies: Companies registered for promoting arts, education, social welfare, or other charitable purposes under Section 8 of the Companies Act 2013.

Eligibility Criteria for Section 12A Registration

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

• The organisation's activities must align with the Income Tax Act's definition of "charitable purposes," which includes poverty relief, education, medical relief, and environmental conservation.
• Activities that serve the public good also count as charitable purposes.
• The organisation must operate without a profit motive.
• If the organisation conducts any trade or commercial activities, these should not exceed 20% of its total receipts to qualify.
• Private or Family Trusts cannot apply for Section 12A registration.

The organisation's work should provide a tangible public benefit to be considered for registration.

Section 12A Registration Validity

Once an organisation gets Section 12A registration, it lasts forever, with no need for renewal. The only way it ends is if the Income Tax Department cancels it. The organisation just needs to keep following the rules to maintain its registration.

Documents Needed for Section 12A Registration

To apply for Section 12A Registration, you'll need to provide these documents:

• Trust or institution Creation Document
• Registration Certificate
• Amendments Proof
• Financial Statements (last three years)
• Activity Description
• Reinstatement Certificate (if previously cancelled)
• Rejection Notice (if previously denied)

Online Application Process for Section 12A Registration

Entities seeking Section 12A registration must use Form 10A, which is now a fully online process. The form requires a digital signature, typically from the trust's founder, for verification. Applications should be submitted electronically to the Commissioner of Income Tax, along with all required documents.

At IndiaFilings, our experts are well-equipped to assist with the 12A registration process, ensuring a smooth and hassle-free experience for your organisation.

80G Registration

80G registration, established under the Income Tax Act of 1961, allows donors to claim tax deductions for contributions to eligible charitable entities. This registration benefits both donors, who can deduct their donations from their income tax returns, and the registered charitable organisations, which can receive tax-deductible donations.

The 2020 Finance Act introduced amendments to the 80G registration provisions. These changes include mandatory annual returns for registered organisations, verification of beneficiaries by the Income Tax Department, and the possibility of registration revocation for non-compliance.

Eligibility for 80G Registration

To qualify for 80G registration, charitable organisations must meet specific criteria:

• Legal Registration: The organisation should be registered under relevant laws, like the Societies Registration Act of 1860 or Section 8 of the Companies Act 2013, with a valid certificate.
• Charitable Objectives: Its objectives must align with charitable purposes defined by the Income Tax Act, such as poverty relief, education, or environmental preservation.
• Financial Compliance: The organisation must follow income tax rules, maintain proper financial records, and submit audited statements.
• Business Income Separation: If it earns business income, it must maintain separate accounts and not use donations for non-charitable purposes.
• Non-Discrimination: It should not exclusively benefit a particular religious community or caste.

Additionally, organisations seeking registration must provide their Darpan portal registration number, especially when receiving government grants or assistance.

Documents Required for 80G Registration

To apply for 80G registration, the following documents are typically required along with Form 10A/10AB:

• Incorporation Document of the Trust/Society
• Registration Certificate (issued by the relevant authority)
• FCRA Registration Certificate (if applicable)
• Approval Order under Clause (23C) of Section 10
• Annual Accounts (for up to three years)
• Annual Accounts and Audit Report (if business income is included)
• Details of Operations (since inception or last three years)

Note: Specific document requirements may vary depending on jurisdiction and the income tax department. Our IndiaFilings experts will assist in the accurate submission of all necessary documents.

80G Registration Validity and Renewal

Initially, provisional registration lasts for three years. After this period, renewal is required, and the renewed registration remains valid for five years. This cycle repeats every five years to continue enjoying the benefits.

80G Certificate

The 80G Certificate, issued by the Income Tax Department, is like a recognition badge for non-governmental organisations such as charitable trusts or Section 8 Companies. Its main purpose is to encourage people to donate to these nonprofits. When donors contribute to an organisation with an 80G Certificate, they can get a 50% tax deduction on the donated amount, reducing their taxable income. To claim this deduction, donors must provide a receipt showing their name, donation date, and the recipient organisation's PAN number.

80G Registration Process

Obtaining 80G registration has evolved due to the Finance Act 2020. Here's the process:

Application for Initial Registration

Organizations apply to the Principal Commissioner or Commissioner for 80G registration. If approved, they receive provisional registration valid for three years, starting from the Assessment Year they applied for.

Renewal Process

To renew, organisations must either apply at least six months before the current validity expires or within six months from the start of their activities, whichever comes first.

The key steps are:

• Application: Apply to the Commissioner of Income Tax (Exemption) within your jurisdiction.
• Submission and Inspection: Submit forms and documents, followed by a physical inspection by Income Tax officials.
• Additional Documents: Provide any requested extra documents during the inspection.
• Certification: The Commissioner awards the coveted 80G certificate once everything checks out.

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 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.