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80G and 12A Registration
80G and 12A Registration
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Choosing to register under 80G and 12A is a strategic decision for non-profit organizations seeking tax benefits and enhanced credibility. These registrations provide exemptions on donations received, encourage contributions, and establish trust among donors. The process is regulated by the Income Tax Department, ensuring compliance with legal and regulatory requirements to support the organization’s growth and impact.

12A and 80G Registrations

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12A Registration Number

12A Certificate

80G Registration Number

80G Certificate

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80G and 12A Registration

What is an 80G Certificate?

An 80G Certificate is issued by the Income Tax Department to non-governmental organizations (NGOs) such as charitable trusts or Section 8 companies. This certificate is intended to encourage donations from individuals and entities by providing them with tax benefits. Donors who contribute to organizations holding an 80G Certificate can claim a deduction of up to 50% of the donated amount from their Gross Total Income. To avail this deduction, donors must submit a stamped receipt for the donation containing details such as the donor's name, date of donation, and the organization’s PAN number.

What is 12A Registration?

Under Section 12A of the Income Tax Act, 1961, trusts, NGOs, and Section 8 companies are eligible for a one-time exemption from income tax on their surplus income. Organizations with a 12A registration are relieved from paying taxes on their surplus income, provided they adhere to specified conditions.

Eligibility Criteria for 80G and 12A Registrations

Organizations seeking 80G and 12A registrations must meet the following criteria:
They should not derive income from business activities.
They must be registered as a society or a charitable trust.
The organization’s funds and assets should be utilized solely for charitable purposes and not for personal gain.
Proper books of accounts must be maintained to record all receipts and expenditures.
The trustees or governing body members should not derive undue benefits from the organization's funds.
The organization should not promote the interests of any particular caste or religion.
Separate books of accounts must be maintained for any business income, and donations received should not be utilized for commercial activities.
Compliance with these criteria is essential for NGOs and charitable organizations seeking 80G and 12A registrations to avail tax benefits and exemptions under the Income Tax Act.

Procedure for Registration

Procedure for 80G Registration:

Submission of Application

Apply for an 80G certificate by submitting a duly filled application along with necessary documentation to the Commissioner of Income Tax (Exemption) within the jurisdictional area of the entity.

Verification Process: Verification Process Additional Documentation

If discrepancies or deficiencies are identified during the verification, the Income Tax Officials may request additional documents or evidence from the organization.

Issuance of Certificate

Upon satisfactory verification of documentation and compliance with prescribed norms, the Commissioner issues an 80G certificate to the institution. It is important to note that the 80G certificate remains valid for the lifetime of the institution.

Procedure for 12A Registration Online in India:

Filing of Application

File an application in Form 10A as per Rule 17A of the Income Tax Act, 1961, for 12A registration.

Completion of Application

Complete the application according to the requirements specified by the Jurisdictional Commissioner of Income Tax (Exemptions).

Verification and Assessment

Upon receipt of the application and supporting documents, the Commissioner verifies the activities of the organization to ensure conformity with statutory provisions. Additional documents or information may be sought if deemed necessary.

Grant or Rejection

Based on a satisfactory verification report, the Commissioner issues a written order granting 12A Registration to the organization. In case of dissatisfaction, the application may be rejected, with the applicant given an opportunity to present their case.

Conditions for Revocation

12A Registration can be revoked if the organization:
Deviates from its stated objectives or activities.
Engages in illegitimate activities.
Benefits a specific caste or religion.
Utilizes funds for illegal purposes.
Channels financial gains for the benefit of a particular group or individual.
Adherence to these procedures and conditions is crucial for organizations seeking 80G and 12A registrations to avail tax benefits and exemptions under the Income Tax Act.

Documents Required

Documents Required for 80G Registration:

For Section 8 Companies and Societies:

Memorandum of Association (MoA) and Registration Certificate.
Trust Deed (in case of Trusts).

Certificate of No Objection:

Certificate from the property owner permitting the use of the registered office premises by the institution.

Form 10G:

Application form for seeking approval under section 80G.

Tax Identification Number:

Copy of the NGO’s tax identification number.

Utility Bills:

Copies of utility bills such as electricity, water, or property tax receipts for the registered office address.

Donor List:

List of donors with their addresses and PAN numbers.

Financial Records:

Income tax returns and audited books of accounts for the past three years.

Activities and Status Report:

Detailed description of current welfare activities and a status report covering the past three years.

Board of Trustees:

Comprehensive list of members constituting the Board of Trustees or equivalent governing body.

MoA, RC, or Trust Deed:

Copies of the Memorandum of Association (MoA), Registration Certificate (RC), or Trust Deed from inception.

Documents Required for 12A Registration:

Formation Documents:

Documentary evidence of the Trust or NGO’s formation, including Trust Deed, Registration Certificate, and Memorandum of Association (MOA) for societies.

For Section 8 Companies:

Certificate of incorporation and copies of Memorandum and Articles of Association (MoA and AoA).

Form 10A:

Application form for registration under section 12A.

Bank Statements:

Bank account statements of the Trust for the past three years.

PAN Card:

Permanent Account Number (PAN) card of the organization.
Adherence to the submission of these documents is essential for the successful processing of applications for 80G and 12A registrations, ensuring compliance with regulatory requirements under the Income Tax Act.

Choose Lexprosoft for Your 80G and 12A Registration !

Choose Lexprosoft for Your 80G and 12A Registration! We simplify the process, ensuring seamless compliance with tax regulations and maximizing benefits for your non-profit organization. Our expert guidance helps you secure exemptions and build trust with donors, fostering growth and impact for your mission.
Contact our Experts today and take the first step towards your startup success!
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80G and 12A FAQ's
What is 80G Registration?
Section 80G of the Income Tax Act provides tax exemptions to individuals and entities donating to charitable organizations. When a charitable trust or institution gets 80G registration, donations made to it are eligible for tax deductions.
What is 12A Registration?
Section 12A of the Income Tax Act provides tax exemptions to charitable or religious organizations. Once an organization gets 12A registration, it is eligible for income tax exemptions on the income it receives from donations, contributions, or any other activities related to its objectives.
What is the difference between 80G and 12A Registration?
80G Registration allows donors to claim tax deductions on donations made to an NGO, encouraging contributions, while 12A Registration exempts the NGO's income from tax, ensuring funds are used solely for charitable purposes. Both are vital for NGOs to maximize financial benefits and compliance.
Who can apply for 80G and 12A Registration?
Charitable trusts, NGOs, religious institutions, and Section 8 companies engaged in charitable activities can apply for 80G and 12A Registration to avail tax exemptions for their income and offer tax deduction benefits to their donors.
What are the eligibility criteria for 12A registration?
An organization eligible for 12A Registration must be a registered charitable trust, NGO, or Section 8 company operating on a not-for-profit basis and engaged in charitable or religious activities. It should maintain proper books of accounts, ensure financial transparency, and apply within the prescribed timeline, typically within one year of establishment.
What are the benefits of 80G and 12A registration?
80G Registration encourages donations by offering tax deductions to donors, while 12A Registration exempts the organization's income from tax, helping retain funds for charitable activities. Together, they enhance credibility, attract more contributions, and ensure financial sustainability for NGOs and charitable institutions.
How can an organization apply for 12A registration?
An organization can apply for 12A Registration by submitting Form 10A online through the Income Tax Department's e-filing portal. It must provide required documents like registration certificates, trust deeds, financial statements, and details of activities, ensuring all information is accurate and complete.
How can an organization apply for 80G registration?
To apply for 80G Registration, an organization must file Form 10G online via the Income Tax Department's e-filing portal. It should submit documents like the registration certificate, audited financial statements, trust deed, and details of charitable activities, ensuring compliance with the eligibility criteria.
Is there a validity period for 80G and 12A registrations?
Yes, both 80G and 12A registrations have a validity period of 5 years. Organizations must renew their registration before the expiry to continue availing of the tax benefits.
Can 80G and 12A registration be revoked?
Yes, 80G and 12A registrations can be revoked if the organization fails to comply with the Income Tax Act's provisions, engages in activities outside its objectives, or misuses funds. Regular audits and adherence to regulations are essential to maintain the registrations.
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