12A & 80G Registration
12A & 80G Registration
If you register your Non-governmental organization and 80G under the section 12A, you will get access to tax exemptions for the surplus funds of the NGO. However if you do not have 80G and 12A registration in Delhi NCR, you won’t be able to enjoy these exemptions.
What is an 80G Certificate?
The Income Tax Department issues an 80G Certificate to a non-governmental organization (NGO), such as a Section 8 Company or a charity trust. The 80G Certificate is given to entice people to make financial contributions to certain nonprofit organizations. Additionally, when a person donates to such a charity, they are allowed to deduct that amount from their gross total income, which results in a tax exemption of 50%. Additionally, the donor must include the stamped receipt for the donation in order to qualify for the exemption. The name of the donor, the date of the donation, and the organization’s PAN must all appear on this receipt.
About 12A Registration
After discussing the 80G Registration, we can go on to Section 12A of the Income Tax Act of 1961 and how to register under it.
Trusts, NGOs, and Section 8 Companies are eligible for a one-time tax exemption under Section 12 A of the Income Tax Act of 1961. Businesses with a section 12A registration are free from paying taxes on their excess income.
NGOs are groups that engage in charity and nonprofit endeavors. They do, however, get income, and if they are not registered under section 12A of the Income Tax Act, they must pay tax at the regular rates.
Advantages of 12A & 8G registration:
If you register your Non-governmental organization and 80G under the section 12A, you will get access to tax exemptions for the surplus funds of the NGO. However if you do not have 80G and 12A registration in Delhi NCR, you won’t be able to enjoy these exemptions.
However, these are not the only benefits associated with 12A registration. Other benefits of this form of registration are as follows:
1. You are going to be benefits pertaining to the tax exemptions.
2. You are going to get governmental grants benefits as well.
3. There are also some benefits that you will get to enjoy pertaining to FCRA registration.
However, there are also some benefits associated with registration under 80G and they are as follows:
1. There are some deductions to the taxes on taxable income.
2. With 80G, more donors are attracted to donate.
If you want access to these exemptions, then you can apply for 80G and 12A registration in Delhi right after you have started your NGO.
The following documents are required for 80G registration is as follows:
1. Form 10G
2. A copy of the PAN of the NGO
3. Copy of Utility Bills such as Electricity bill, water bill or House Tax Receipt
4. A list of the donors along with their address and PAN
The following documents are required for 12A registration:
1. Form 10A.
2. Three-year bank account statement of the Trust.
3. PAN of the organization.
80G Registration Procedure Consists Of The Following Steps:
1. Apply for an 80G certificate to the Commissioner of Income Tax (Exemption) within the jurisdictional area of the entity along with the required documents.
2. An on-premise inspection is done by the Income Tax department after the form, and the required documents for 80G registration are submitted
3. However, the Income Tax Officials might ask for additional documents or evidence if they seem unfit, or if they feel anything is missing
4. Upon satisfactory verification of documents and the office of the NGO, 80G certificate is granted to the institution by the Commissioner.
You are required to follow these steps for 12A registration:
1. You need to file an application in the Form 10A, as per Rule 17A of the Income Tax Act, 1961
2. The application needs to be filled as per the guidelines of the Jurisdictional Commissioner of Income Tax (Exemptions)
3. The Commissioner verifies the genuineness of the activities of the organization, once he receives the Form and the documents. Also, he can call for additional documents or information if he considers necessary
4. On the satisfactory report, the Commissioner passes an order in writing for the grant of 12A Registration. If the Commissioner is not satisfied he will reject the application, after which the applicant is provided a fair chance to be heard.
FAQ
The benefits of 12A registration are as follows:
1. You will get tax exemptions.
2. You will be able to get grants from the governments
3. You will be able to get the benefits of FCRA registration.
The benefits of 80G registration are as follows:
1. The donor can avail deductions on taxable incomes
2. This causes the owners to be attracted towards making a donation.
Some donations meet all requirements for either half or 100% assessment conclusion though some others fit the bill for a similar finding yet up to a most extreme restriction of 10% of Adjusted Gross Total Income of the citizen.
The Income Tax Department grants trusts and other not-for-profit organisations a one-time registration known as a 12A registration. The registration is done in order to avoid having to pay income tax. Typically, 12A registration is requested as soon as an entity is incorporated.
