Who all are covered to obtain registration under 80G and 12A?
Only NGO's and charitable organizations are covered to obtain 80G Registrations and 12A Registration subject to the following conditions:-
- Have no business income
- Such organization is either a charitable trust or a registered society
- Such organization does not use their assets and incomes for purposes other than the purpose of charity.
- Records of each and every receipts and expenses are maintained by such organisation.
- No undue advantages are drawn from the organization by the trustees or the governing body of the organization.
- The work should not benefit any particular caste or religion undertaken by any person working in the organization.
- Separate account should be maintained in case there is income from the business. Any donations received by the NGO should not be used for such businesses.
After the incorporation of the Non government Organization, registration under 12A and 80G must immediately be obtained.
What does 80G Certificate mean?
Income tax department issues the 80G Certificate to the non-profit organization or non-governmental organizations (NGO), a charitable trust or a Section 8 Company. In order to increase the donation amount by the donors such 80G certificate are issued. The tax exemption on 50% of donor’s donation shall be allowed as such deduction is allowed from Gross Total Income. NGO issues the stamped receipts against the donation to the donor who is required to attach by the donor in order to claim deduction and such receipt includes the name, date, and Permanent Account Number (PAN) of the organization.
What is the process to obtain 80G Registration?
Following steps are required to be followed:
- Submission of the application for 80G certificate to the Commissioner of Income Tax (Exemption) in the jurisdictional area of the institution.
- Income Tax department shall inspects the premises of the organization once the form and the other necessary documents are submitted for 80G registration.
- Organizations are required to submit the additional documents and evidences as required by the officials.
- Commissioner shall grant the 80G certificate to the organization after satisfactory verification and scrutinizing of documents and the office of the NGO.
Validity: 80G Certificate remains valid for lifetime.
Which Documents are Required for registration under 80G?
The documents required for 80G registration are as follows:
- Form 10G.
- In case of Section 8 companies and Societies, Registration certificate and MOA where as Trust Deed in case of a Trust.
- The owner of the property where the registered office of the organization is located is required to submit No Objection certificate (NOC).
- NGO’s Permanent Account Number (PAN).
- Utility Bills copy – Electricity bills, water bills or House Tax Receipt.
- List of donors with their complete address and Permanent Account Number.
- Last three year’s Book of Accounts & Income Tax Return.
- Last three year’s progress report and the welfare activities.
- Board of trustee’s detailed list.
- Verification Deed – Original Registration Certificate, Memorandum of Association (MOA) or Trust Deed.
What does 12A registration mean?
12A registration is applicable to both kind of organization whether it is a charitable or religious Trust as this section 12A does not differentiate between charitable and religious Trust. Trusts and NGOs and other Section 8 companies are required to obtain registration under12A section of the Income Tax Department in order to enjoy exemption from paying income tax.
What is the process to obtain 12A Registration?
- As per Rule 17A of the Income Tax Act, 1962, the application is required to be filed through Form 10A with the Jurisdictional Commissioner of Income Tax (Exemptions).
- Authentication of the activities of the organization shall be verified by the Commissioner after receiving the Form and the documents from the applicant. Additional documents and information may be called by such Commissioner.
- 12A Registration in writing shall be passed by the commissioner after satisfaction of the report. The application may be rejected by the commissioner where the commissioner is not satisfied with the report and a fair chance shall be given to the applicant for hearing.
Where the activities of the organization does not conform with the object of the organization or the activities are carried out for the benefit of any particular religion or caste or the funds are being invested in prohibited modes or income of the institution is being used for the benefit of specific persons, then in such case 12A Registration can be cancelled at any point subject to the condition that proof must be obtained by such person cancelling the 12A Registration.
Validity: 12A Registration remains valid for lifetime.
Which Documents are Required for 12A Registration?
The documents required for 12A registration are as follows:
- Form 10A.
- Documents which provide evidence for the creation of the Trust or NGO – such as:
- Trust Deed of a Trust;
- Registration Certificate and Memorandum of Association of a society;
- Certificate of incorporation and copies of Memorandum of Association (MOA) and Article of Association (AOA) of the company in case of Section 8 Companies.
- Trust’s bank account statement for a period of 3 years.
- Organization’s Permanent Account Number (PAN).