Registration Process of 12A and 80G Certificate

Narendra Kumar

14 Jul, 2022

An NGO & 80G can apply for 12A for tax exception on a surplus fund of the NGO as well can obtain 80G certification for donor’s tax exception.

What is Registration under Section 12A?

It is a registration done by NGO to get an organization income exempted from Tax. All income shall not 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 the 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?

Eligibility:

• Charitable Trusts, Religious Trusts, Societies, and Section 8 Companies
• Not applicable to the Private or family Trust.

Process:

It is a one-time registration process. Prior to applying for an exemption certificate under section 12A, the NGO shall get it’s NGO registered under the Income Tax.

• 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;
  • A certified true copy of the instrument(registration certificate) under which the trust/institution was created/established;
  • A 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 the 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. On 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. The Registration done once is valid for a lifetime.

What is the Process for Registration under Section 80G of Income Tax?

Eligibility:

• 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:
  1. The charities with a religious or business angle.
  2. Nonseparation of Business and Charity account if the charity is involved in any business which does not account for donation alone.
  3. Tax benefits are not available to a donor who is donating to NGO which is not registered under 80G or funding for a political party or gifts made to trusts operating outside India.

Process:

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:
  1. Registration Certificate and MOA /Trust Deed
  2. NOC from Landlord (where the registered office is situated)
  3. Copy of PAN card of NGO
  4. Copy of Electricity Bill / House tax Receipt /Water Bill
  5. Evidence of welfare activities carried out & Progress Report since inception or last 3 years
  6. The statement of accounts, Balance Sheet since inception or last 3years
  7. List of donors along with their address and PAN
  8. List of governing body board of trustees members with their contact details
  9. 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 the 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 application, the commissioner may reject the application of an NGO. To avail the deduction the payment shall be made as specified under the law.

The registration process may take time up to 3 to 4 months. The Registration done once is valid for a lifetime.

Read our Article: Tax Exemption: Steps for Getting an 80G Certificate