Apply your 80G and 12A Registration online with the help of our expert team.
It is true that many people donate out of an innate desire to give back to society, the availability of tax deductions can also be a motivating factor for some donors. The ability to claim tax deductions on donations to registered NGOs under Section 12A and 80G of the Income Tax Act can provide additional benefits to both the donor and the NGO. 80G and 12A registrations are two important registrations under the Income Tax Act of India that provide tax benefits to NGOs and charitable organizations.
Registration Certificate and By Laws of the NGO
Copy of PAN Card of the NGO
Copy of Pan Card and Address proof of the members
Income Tax Login Credentials
Digital Signature for digitally signing the application form
Brief Profile of Ngo and Its welfare activities.
Non-profit motive
NGOs applying for 12A and 80G registration must have a non-profit motive, meaning that their objective should be to promote a charitable or philanthropic cause, and not to earn a profit.
Charitable activities
The NGO should be engaged in activities that fall under the definition of "charitable purpose" as per the Income Tax Act, such as relief of the poor, education, medical relief, and the advancement of any other object of general public utility.
Legal entity
The NGO must be registered as a legal entity such as a trust, society, or a section 8 company, and should have a registration certificate.
Proper book-keeping
NGOs must maintain proper books of account, showing their income and expenditure, and should have these audited by a chartered accountant.
No political activity
NGOs applying for 12A and 80G registration cannot engage in any political activity or promote any political party.
Compliance with other laws
NGOs should comply with all other applicable laws, including filing of annual returns with the Registrar of Societies or Registrar of Companies, as the case may be.
Under Section 80G of the Income Tax Act, donors who make donations to registered NGOs and charitable organizations can claim a deduction from their taxable income. The deduction amount can be either 50% or 100% of the donated amount, depending on the type of organization and the nature of the donation. To avail of this benefit, the organization must have 80G registration. 80G registration is granted by the Income Tax Department to eligible NGOs and charitable organizations after verifying their credentials.
80G registration provides the following benefits to the NGO and its donors:-
Tax deduction to donors
Donors who contribute to an NGO registered under 80G can claim a deduction of up to 50% of the donated amount from their taxable income. This helps encourage donations to charitable organizations.
Encourages donations
80G registration acts as an incentive for individuals and organizations to donate to registered NGOs. The availability of tax deductions motivates more people to contribute to charitable causes, as it reduces the net cost of their donation.
Greater trust and credibility
An NGO registered under 80G enjoys greater trust and credibility among donors and the public, as it provides assurance that the organization is recognized by the government and operates for genuine charitable purposes.
Increased donor base
An NGO with 80G registration can attract more donors, as they can benefit from tax deductions for their donations. This can help increase the NGO's financial resources and further its charitable activities.
Long-term donor relationships:
Once donors realize the tax benefits available through 80G, they are more likely to establish long-term relationships with the NGO, supporting it consistently over time.
Under Section 12A of the Income Tax Act, NGOs and charitable organizations can apply for registration to get their income exempted from income tax. This registration is necessary for an organization to be considered as a charitable entity and to be eligible for other tax benefits and exemptions. To qualify for 12A registration, the organization must be engaged in genuine charitable activities and must have a minimum three-year track record of such activities.
80G registration provides the following benefits to the NGO and its donors:-
Tax exemption
The primary benefit of 12A registration is that it provides tax exemption to registered NGOs. NGOs with 12A registration are exempt from paying income tax on their income generated from charitable activities. This exemption enables NGOs to utilize more of their funds for charitable purposes, rather than paying taxes to the government.
Enhanced credibility
12A registration enhances the credibility and trustworthiness of the NGO in the eyes of donors and the public. It demonstrates that the NGO has undergone scrutiny by the Income Tax Department and has met the necessary criteria to be eligible for tax exemption.
Eligibility for government funding
Many government schemes and programs require NGOs to have 12A registration to be eligible for funding. This registration opens up opportunities for NGOs to apply for government grants and funding, enabling them to expand their activities and reach more beneficiaries.
Compliance with legal requirements
NGOs are required to file their annual income tax returns to maintain 12A registration, which ensures compliance with legal requirements. This compliance helps NGOs avoid any legal repercussions that may arise due to non-compliance with tax laws.
Increased donor confidence
12A registration increases donor confidence in the NGO, as it assures them that their contributions will be utilized for charitable purposes and not for personal gain. This increased confidence can lead to more significant donations and long-term relationships with donors.
80G registration is a provision under the Income Tax Act that enables donors to claim tax deductions on their donations to eligible NGOs. It is important for NGOs as it encourages individuals and organizations to donate to their cause, increasing their funding and support.
NGOs that meet certain criteria, such as being registered as a trust, society, or Section 8 company and using their assets solely for charitable purposes, are eligible for 80G registration. The NGO must also maintain proper books of account and file their income tax returns on time.
Donors can claim tax deductions on their donations to eligible NGOs with 80G registration. This enables them to reduce their taxable income and lower their tax liability while supporting a charitable cause.
12A registration is a provision under the Income Tax Act that provides tax exemption to registered NGOs. It is important for NGOs as it enables them to utilize more of their funds for charitable purposes, rather than paying taxes to the government.
NGOs that meet certain criteria, such as using their income solely for charitable purposes and maintaining proper books of account, are eligible for 12A registration.
The benefits of 12A registration for NGOs include tax exemption, enhanced credibility, eligibility for government funding, compliance with legal requirements, increased donor confidence, and improved reputation.
One can avail of from 50% to 100% tax deductions from the Income Tax Department without restriction.
80G registration provides tax benefits to donors by allowing them to claim deductions on their donations to NGOs, while 12A registration provides tax exemption to NGOs themselves, exempting them from paying income tax on their charitable income.
No, not all NGOs are eligible. NGOs must meet specific criteria such as having a non-profit motive and engaging in charitable activities. The legal entity of the NGO, such as a trust, society, or Section 8 company, also plays a role in eligibility.
Yes, NGOs registered under 80G and 12A can receive foreign donations. However, it is important to comply with the Foreign Contribution (Regulation) Act (FCRA) and other applicable regulations for receiving foreign funds.
Mylegalbusiness.com is a platform that can provide assistance in the registration process for 80G and 12A under the Income Tax Act, 1961. We have a team of professionals who are dedicated to ensure timely and efficient registration for our clients.