12A and 80G Registration
Effortlessly obtain both 12A and 80G registration for your charitable organization. This combined registration provides tax-exempt status for your organization and allows your donors to claim tax deductions, making your cause more attractive and financially sustainable.
12A and 80G Registration for Non-Profit Organizations in India
In India, 12A and 80G registration are crucial for non-profit organizations seeking tax exemptions and incentives. 12A registration exempts an NGO’s income from income tax, allowing it to use all its funds for charitable activities. In contrast, 80G registration provides a significant benefit to donors by allowing them to claim a tax deduction on their taxable income for donations made to a registered NGO.
At FileMyFirm, we offer comprehensive assistance and guidance throughout the 12A and 80G registration process, helping your organization secure these vital tax benefits.
Understanding 12A and 80G Registrations
- 12A Registration: This certification, under the Income Tax Act of 1961, makes an NGO eligible for a tax exemption on its income. This means funds generated from grants, donations, or other sources are not taxed, provided they are used for the organization’s charitable purposes. This is a fundamental step for any non-profit organization.
- 80G Registration: This registration is designed to encourage donations. It allows donors—both individuals and entities—to claim a deduction on their income tax for the donations they make to an 80G-registered NGO. This financial incentive can significantly boost an organization’s fundraising potential.
Who Can Apply for 12A and 80G Registrations?
The following types of non-profit organizations are eligible to apply:
- Charitable Trusts
- Registered Societies
- Section 8 Companies (formed under the Companies Act for charitable purposes)
- Religious, educational, and medical institutions that operate on a non-profit basis.
Eligibility Criteria
To successfully obtain 12A and 80G registration, an organization must meet specific requirements:
12A Registration Eligibility:
- The organization must be registered as a trust, society, or Section 8 company.
- Its primary objective must be charitable or religious, with no profit motives.
- All income and assets must be used exclusively for its stated charitable or religious purposes.
- The organization must maintain proper financial records and file tax returns on time.
80G Registration Eligibility:
- The organization must already have 12A registration or have applied for it simultaneously.
- It must be a non-profit organization serving the public interest.
- Its benefits should not be restricted to any particular religious community or caste.
- The organization’s income from commercial activities must not exceed 20% of its total receipts in the previous year.
Benefits of 12A and 80G Registrations
Securing both 12A and 80G registrations offers substantial benefits:
- Tax Exemptions: The organization’s income is tax-free, and donors can claim tax deductions.
- Enhanced Credibility: These registrations provide a stamp of approval from the Income Tax Department, building trust and transparency.
- Increased Fundraising: The tax benefits for donors make giving more attractive, leading to increased donations and a broader donor base.
- Access to Grants: Many government and corporate grants require these registrations as a prerequisite for funding.
- Long-Term Sustainability: Consistent funding and enhanced credibility contribute to the organization’s long-term sustainability and ability to carry out impactful projects.
The 12A and 80G Registration Process Online
Under recent regulations, all new and existing non-profit organizations must apply for or re-register under Section 12AB by filing Form 10A or Form 10AB on the Income Tax website.
- Preparation: Ensure your organization is legally registered as a trust, society, or Section 8 company.
- Document Gathering: Collect all necessary documents, including the Trust Deed, Memorandum of Association, PAN card, and audited financial statements for the last three years.
- Online Application: Fill out and submit Form 10A on the Income Tax Department’s portal.
- Review and Verification: The tax authority will review your application and may request additional information or conduct an inspection.
- Issuance of Certificate: Upon successful verification, your organization will be granted the 12A and 80G registration certificate.
Validity and Renewal
Provisional registration is granted for three years. Regular registration is valid for five years and must be renewed at least six months before the expiry date by filing a new application.
FileMyFirm provides expert guidance on the entire process, ensuring a seamless and hassle-free experience. Contact us today to get started!
Frequestly asked questions ( FAQ )
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