Registration Process of 12A and 80G Certificate
What is Registration under Section 12A?
It is a registration done by NGO to get an organization income exempted from Tax. Not all income shall be taxable after 12A registration. If NGO does not get 12A Registration, income tax is payable on surplus during the year.
What are the benefits of Registration under Section 12A?
- Income will be exempted from taxation.
- Benefits of taking grants from Government, Abroad, other agencies.
- Benefits of FCRA Registration.
What is Registration under Section 80G?
80G Registration under Section 80G of Income Tax Act provides benefits to the donor of an NGO. The donor gets financial benefits in his taxable amount of their income.
What are the benefits of registration under Section 80G?
- The donor can avail deduction from its taxable income.
- Attracts the donor to make a donation.
When can you apply for 12A and 80G exemption Certificate?
Exemption certificate under Section 12A and 80G can be applied immediately after the registration of NGO. The application for 12A and 80G certificate can be filed together or can file separately as well. The application under Section 12A needs to be filed the application under Section 80G. The applications shall be a file with the commissioner of Income Tax having jurisdiction over the institution.
What is the Process for Registration under Section 12A of Income Tax?
- Charitable Trusts, Religious Trusts, Societies, and Section 8 Companies
- Not applicable to the Private or family Trust.
- The application shall be made in Form 10A to the Income Tax Commissioner.
- The application shall contain the following documents:
- List of name, address and Pan details of the trustees/managers;
- Certified true copy of the instrument(registration certificate) under which the trust/institution was created/established;
- Certified true copy of the document (Trust deed/MOA and AOA) which is evidence of such institution/trust creation;
- Copy of PAN card of NGO.
The issue of a certificate under Section 12A of Income Tax Act:
Once the application made by the NGO in the specified format to the Commissioner of Income Tax, the commissioner shall review the same.
Review of the application, the commissioner may ask for additional information or document to submit.
On satisfaction of all information or application, the Commissioner shall pass an order in writing registering the Trust/Institution under Section 12A of Income Tax Act. On non-satisfaction of an application, the commissioner may reject the application of an NGO.
The registration process may take time up to 3 to 4 months.
Registration done once is valid for lifetime.
What is the Process for Registration under Section 80G of Income Tax?
- Donation made to charities prescribed under category 80G.
- The NGO shall be duly registered under the Act.
- Following are the non-eligible for registration under 80G Certification:
- The charities with a religious or business angle.
- Non separation of Business and Charity account if the charity is involved in any business, which does not account for donation alone.
- Tax benefits are not available to a donor who is donati
ng to NGO, which is not registered under 80G or funding for a political party or gifts, made to trusts operating outside India.
The prior requirement for getting registration under section 80G is obtained registration under Section 12A.
- The application shall be made in Form 10G to the Income Tax Commissioner.
- The application shall contain the following documents:
- Registration Certificate and MOA /Trust Deed
- NOC from Landlord (where the registered office is situated)
- Copy of PAN card of NGO
- Copy of Electricity Bill / House tax Receipt /Water Bill
- Evidence of welfare activities carried out & Progress Report since inception or last 3 years
- The statement of accounts, Balance Sheet since incep
- tion or last 3years
- List of donors along with their address and PAN
- List of governing body board of trustees members with their contact details
- Copy of registration granted under section 12A or copy of notification issued under section 10(23)or section 10(23C)
The issue of a certificate under Section 80G of Income Tax Act:
On receipt of an application, the Commissioner Scrutinize and may ask additional documents or information. After satisfaction of an application, the Commissioner may pass an order in writing registering the Trust/Institution under Section 80G of Income Tax Act. On non-satisfaction of an applic
ation, the commissioner may reject the application of an NGO. To avail the deduction the payment shall be made as specified under the law.
List of 100% allowed donation
- National Defence Fund set up by the Central Government
- Prime Minister’s National Relief Fund
- National Foundation for Communal Harmony
- An approved university/educational institution of National eminence
- National Sports Fund
- Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
- Fund set up by a State Government for the medical relief to the poor
- National Illness Assistance Fund
- National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
- Fund for Technology Development and Application
- National Children’s Fund
- Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
- National Cultural Fund
- The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
- The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October 6, 1993
- Chief Minister’s Earthquake Relief Fund, Maharashtra
- Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
- Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001 and September 30, 2001) or
- Prime Minister’s Armenia Earthquake Relief Fund
- Africa (Public Contributions – India) Fund
- National Blood Transfusion Council or to any State Blood Transfusion Council
- Swachh Bharat Kosh (applicable from FY 2014-15)
- Clean Ganga Fund (applicable from FY 2014-15)
- National Fund for Control of Drug Abuse (applicable from FY 2015-16)
Donations Eligible for 50% Deduction Without Qualifying Limit
- Jawaharlal Nehru Memorial Fund
- Prime Minister’s Drought Relief Fund
- Indira Gandhi Memorial Trust
- Rajiv Gandhi Foundation
- Donations Eligible for 100% Deduction Subject to 10% of Adjusted Gross Total Income
- Government or any approved local authority, institution or association to be utilised for the purpose of promoting family planning
- Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India.
- Donations Eligible for 50% Deduction Subject to 10% of Adjusted Gross Total Income.
- Any other fund or any institution which satisfies conditions mentioned in Section 80G(5)
- Government or any local authority to be utilized for any charitable purpose other than the purpose of promoting family planning
- Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both
- Any corporation referred in Section 10(26BB) for promoting interest of minority community
- For repairs or renovation of any notified temple, mosque, gurudwara, church or other place.
KUMAR RAHUL ANAND
KANOON KI SAMAJH