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NGO Registration Under Section 80G & Section 12A

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NGOs are established for good causes, and the government provides tax exemptions to assist them with raising funds. Now is the time to register your NGO under Sections 80G and 12A in order to avail of those benefits for your NGO

*Government Statutory fees would be charged seprately

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Introduction

NGOs primarily rely on donations to support their functioning. To claim those tax exemptions (available to both donors and recipients), NGOs are to register under Section 80G and Section 12A of the Income Tax Act. The process is complicated and time-consuming, and it can be difficult for non-professionals to do it.

Moreover, recent changes have mandated that all the NGOs who have already registered under these 2 sections re-register under sections 80G and 12A to continue enjoying those tax benefits. Further, if an NGO seeks CSR funding, they are required to register using Form CSR-1.

Re-validation Under Sections 12A and 80G

Time Taken:

The overall process may take up to three months, where the application shall be made within 1 week from the date of submission of documents. It holds a 5-year validity and requires renewal every 5 years.

Document Required For Re-validation

1.Registered trust deed/society registration certificate/incorporation certificate

4.NGO DARPAN ID (if receiving government grants)

2.Self-certified copies of audited annual accounts for the preceding three financial years

5.FCRA ID (if receiving foreign donations)

3.Self-certified copy of the certification previously obtained under 12A and 80G

6. A note on the activities of the applicant.

Registration Under 12A:

As registration under Section 12A is for tax exemption, an NGO which has not registered under this cannot enjoy the privilege of tax exemption and would have to pay taxes just as any normal registered company would during the year.

How to Register Under Section 12A

All charitable trusts, societies, and Section 8 Companies, except private or family trusts, are eligible to register under Section 12A. But, before registration under 12A and 80G, an NGO has to first register with NGO Darpan, a register maintained by the Government of India, and then be registered under the Income Tax Act (This is not compulsory, it is an option available to trusts. A charitable organisation without Darpan can also apply for 12A and 80G) by following the steps mentioned below.

Benefits:

Provision to gain grants from governments and international organisations.

Registration certificate serves as valid proof of the purpose of the NGO and its operations.

All NGOs, be they trusts, companies, or societies, are eligible to avail exclusion from taxes

FCRA registration benefits.

Step 1

An application has to be filed in Form 10A with the Commissioner of Income Tax - Exemption

The Document which is required for registration under 12a need to be submitted

Step 2

The application will be reviewed by the Commissioner, who might ask for additional information

Step 3

Step 4

If everything is found to be satisfactory, the registration will be completed soon after, else it will be rejected.

Registration Under 80G:

As per Section 80G of the Income Tax Act, if an NGO gets an 80G certification then it’s donors will be allowed to reduce the amount of donation made from its total Income (proportion of deduction allowed depends on the type of organisation), thus being incentivised to contribute some part of their disposable income towards good causes.

How to Register Under Section 80G

Any NGO that wants to register under Section 80G has to be duly registered and should be working specifically towards charitable objectives.