In India, non-profit organisations can benefit significantly from two specific registrations provided by the Income Tax Department: 12A and 80G.
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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. So, the 12A and 80G registration process online must be done by the non-profit organisations to avail tax deduction benefits.
At LegallensIndia, 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!
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:
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.
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.
The key difference between 12A and 80G is that 12A registration provides tax exemption on an NGO’s income, while 80G registration allows donors to avail tax deductions on their donations. Both registrations enhance NGOs' ability to attract contributions by offering fiscal advantages to both the organisations and their benefactors. So, it is useful to register and obtain the 12A 80G certificate.
The following types of organisations are eligible to apply for 12A 80G registration,
To be eligible for Section 12A/80g registration, organisations need to meet specific requirements set by the Income Tax Department:
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:
This allows donors to claim tax deductions on donations made to eligible non-profit organizations. Eligibility for Section 80G registration includes:
Additional Notes:
The benefits of obtaining 80G and 12A registrations for charitable organizations and NGOs are substantial, impacting various aspects of their operations:
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.
The validity of 12A and 80G registrations depends on the type of registration obtained. There is no annual renewal requirement; however, registrations must be renewed periodically. Provisional registration is granted for a period of 3 years, while the validity of regular registration is for 5 years. The renewal process must be initiated at least 6 months before the expiry of the current registration. For example, if the validity is up to 31st March 2025, the renewal application should be submitted on or before 30th September 2024 to ensure continuous compliance.
For NGOs to successfully complete the online registration process for 12A and 80G, they must provide a comprehensive set of documents required for 12A and 80G registration 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 covers the 12A and 80G registration documents required:
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 12A and 80G registration process online in a detailed step-by-step guide below on how to apply 12A and 80G online.
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.
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.
LegallensIndia can help you register your society, NGO, or Section 8 company. Our experts are here to assist you every step of the way.
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.
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.
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.
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.
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.
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 12A 80G certificate is vital for confirming your organization's legal status and enabling tax benefits for both the NGO and its donors.
LegallensIndia offers expert assistance in securing both 12A and 80G registrations. Our experts guide organisations through the intricate registration processes, ensuring compliance with affordable 12A and 80G registration fees. Whether the initial 80G and 12A registration registration or renewal, LegallensIndia 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.
