12A and 80G Registration

Importance of Non-Profit Organizations to India on its Social and Economic Development But they do not have a revenue source that is steady enough to cover their own costs. They rely heavily on free contributions, donations and other types of non-addressable gifts.

These donations all support their ongoing activities and projects to reach their goals.’ Between these contributions, the Government attempts to stimulate donations to non-profit organizations through 12A and 80G Registrations. Let’s understand how!

12A Registration: Section 12A of the Income Tax Act, 1961 provides for NGOs to avail 12A registration. It grants such organisations a tax exemption on their income received by way of grants, gifts, donations or contributions without any obligation to conduct scientific research. Every NGO who wants to take the advantage of Section 12A need to get registered in this.

80G Registration: 80G registration is granted to NGOs for procuring tax exemption till a specified level of their donations which they receive from other entities. The goal of obtaining 80G registration is to motivate gifts/donations to NGOs in order for them to function without any hindrance in the welfare works. This registration is not mandatory and is available only if you have already got 12A Registration.

Section 12A of the Income Tax Act

12A of the Income Tax Act contains the provisions for NGOS to be applied Sections 11 and 12. 11 provides for the calculation of exclusions from total income applicable to other sources in the previous FY. Also, Section 12 makes it clear that voluntary contributions in the nature of grants and donations for charitable or religious purposes are also included in such income.

Section 80G of Income Tax Act

Section 80G (1) provides that, only specific types of donations are allowed deduction from the total income. Subparagraph (2) itemizes all such contributions with specificity. This also consists of donations to a non-profit firm that has actually taken the 12A Registration. The non-profit organization should be registered in India, and any funds remitted will be used for charitable and religious activities only.

Who can give 12A and 80G registration?

12A 80G registration can be applied by the following kind of institutions:

1. Charitable Trusts: Trusts for the public’s benefit.
2. Registered Societies: Only structured societies which are registered under the Societies Registration Act or any such local Acts.
3. Section 8 Companies: Companies that are incorporated under Section 8 of the Companies Act (2013) for promoting charity.
4. Religious organizations: Religious groups are primarily engaged in religious worship or instructing for the same and most types of charitable activities.
5. Educational Establishments: Charity schools, colleges and educational trusts.
6. Institutions: Not-for-profit hospitals and medical research institutions

Eligibility Conditions for 12BE Registration Spotlight

The Plan It’s so easy, we can explain it in one word.

There are some preconditions established by the Income Tax Department which an organisation needs to satisfy to be qualified for Section 12A/80g registration:

12A Registration Eligibility Criteria

This part is related to the registration of charitable or religious NGO’s which exempt from tax on all donations received as income. For an organisation to obtain Section 12A registration, it has to fulfill the conditions that –

1. Nature of the Organization: applicable for trusts, societies or Section 8 companies formed with the objective of charitable or religious purposes as defined under Section 2(15) of Income Tax Act. Such activities include poverty alleviation, education, medical aide and environmental protection among others. For organisations running on any of these activities need the 12A certification to get trust.
2. Charitable Purposes: The organization should look to realize its stated philanthropic purposes with none of its actions or motives furthering individual or personal profits of any particular individuals. Trust can get 12Acertificate if fall under this category.
3. Registration Proof: Must be registered as a trust/ society or Section 8 company in accordance to the applicable Act and documentary proof is mandatory during application.
4. Utilization of Income: The income and assets must be used for charitable or religious purposes, directly and indirectly in which no benefit is allowed to Members or individuals.
5. Book-keeping: A good accounting of all transactions is required to produce accurate financial records.
6. Tax Compliance: In addition to filing annual tax returns, even with the exempt status in place.
7. Non-political: The organisation cannot be involved in or support political activities, the 12A status will be revoked if this is found.

80G Registration Eligibility Criteria

So that donors can receive tax deductions for donations to qualifying non-profit organizations. Following is the list of who can register for section 80G:

1. Type of Organisation: The applicant organisation MUST be a not-for-profit registered Trust, Society or Section 8 company with activities targeting charitable or religious purposes, falling in the public benefit domain.
2. 12Registration under Section 12A Pre-Condition: Already exempt u/s.11 & 12 by virtue of 12A registration.
3. Use of Income for Charity: the organisational documents and governing body mustt contain strict limits on expenditure which are only charitable.
4. Inclusive Beneficiaries: Organization’s benefits should not be confined to certain religious community or caste so that society at large is benefitted.
5. Routine Accounting: Clear and accurate financial records are to provide accountability as well.

Validity of 12A and 80G Registration

The validity of 12A and 80G registrations will be based on the type of registration granted. There is no yearly renewal; but registration must be continued in some period. Provisional registration is effective for 3 years while that of regular registration is 5 years. Renewal An application for the renewal of a registration holder shall be submitted not latter than 6months to its expiry. If you expiry date is 31st March 2025, the next renewal should be done on or before 30th September 2024 to remain compliant continuously.

Required 12A and 80G Registration Documents

NGOs need to upload complete 12A and 80G documents to get registration successfully in online mode. If the mentioned documents are not submitted, it is likely that the registration might be considered incomplete and refused by the officials. Following is a comprehensive list of documents that are needed for 12A or 80G registration in India.

Here is the list that covers the 12A and 80G registration documents for you:

1. Trust Deed/Society Registration Certificate/Section 8 Company Certificate if available.
2. (Memorandum of Association and Articles of Association (only in case of Section 8 company))
3. PAN card of the organization
4. Bank statement of the organization
5. Audited accounts of the group for past three years
6. Names, addresses and occupation of the board of trustees/members/directors.
7. A list of activities conducted by the organization

How to Obtain 12A and 80G Registration?

Form 10A is the new application form for making applications under section 12A and 80G of Income Tax Act since new amendments brought by Finance Acts in 2020 & 2021. We have described the new and revised 12A & 80G registration procedure online at step wise guide as under: If you have problem in understanding, our free consulting are there to help.

Step-1: Creation and Registration of NGO

Start by selecting the type of registration for your NGO; you can choose from a trust, society, or Section 8 company (based on your state’s rules and regulations). After you figure out the legal structure, register your organization as per whatever regulatory body it falls under (Registrar of Societies/ Registrar of Companies or specific applicable entity).

Step-2 : Document Collection

Please gather the necessary documents required for filing 12A and 80G registration applications on form 10A like your organisation’s registration certificate, MOA / Bye Laws / Trust Deed, audited financial statements, FCRA Registration, NGO Darpan ID etc. These papers will be your proof that your NGO truly exist and it is genuine.

Step-3 : Application Preparation

Fill up Form 10A, the application form for registration under Section 12A & 80G of Income Tax Act. This form can be downloaded from official website of the Income Tax Department, or visiting nearest Income tax office. Be sure to provide complete and accurate information when completing the form, such as details about your organisation’s aims, activities and management committee members.

Step-4 : Application Submission

The filled up Form 10A and required documents need to be filed in the Office of the Commissioner of Income Tax or can file it on the website of Income Tax. This is a formal start of 12A/80G registration process for you. Retain copies of all submitted documents for your records.

Step-5 : Review and Inspection

Your application will be scrutinized by the tax authority when you have filed it for the check whether or not your NGO meets with the requirements of Section 12A/80G registrations. They might also make an examination of the activities and financial records in your organisation, to verify compliance and truthfulness.

Step-6 : Registration Decision

One of two things will happen as the review process unfolds: If all goes well, the tax department will approve your application and issue registration under Section 12A/80G to your NGO If there are any issues found in your paperwork or mismatches in declarations made then you might face a rejection. You will be able to solve any problems in this situation.

Step-7 : Registration Intimation

If the registration is successful, you will obtain a certificate of registration issued by the tax agency. This certificate these certifies that your NGO is entitled for the exemption of tax under section 12A / S0G of Income Tax Act. It’s an important piece of paper proving your organisation’s legal existence and enabling you to benefit from tax exemptions for both your NGO and its donors.

GARUDAMUDRA: So That You Get Hassle Free 12A and 80G Registration!

Garudamudra provides professional guidance to obtain both 12A and 80G registrations. Our professionals assist the organisations through various complex registration steps and take care of affordable 12A and 80G registration rates. Be it a 80G, 12A registration registration or renewal, Garudamudra offers consultancy services to make the process convenient and help organisation fulfil their charitable mission with tax benefits.