Section 80G and 12A Registration: What Every NGO Needs to Know
Section 80G & 12A registrations have probably been named on your pillow by now if you’re working, or planning to work, in the NGO sector in India. These two are arguably the most valuable concepts you need to understand if you wish to help grow your business and get the best value for its resources. They are tools that may help your NGO to save a lot of money, become trusted, and attract more donations than they are simply additional procedures to fulfill. We will discover what kinds of awards they are, their importance and how to get them.
Why Section 80G and 12A Registrations Matter
Tax Relief for NGOs: To be clear, any money generated by your non-profit organization is completely taxed if it isn’t registered under 12A. This implies that rather than supporting your cause, a portion of your money is consumed by taxes. Your NGO can get additional funding for its operations by registering under 12A, which exempts it from this requirement.
More Donations with 80G: Donors love tax breaks, and that’s what 80G offers. When your NGO is registered under 80G, donors can deduct the amount they donate from their taxable income. This makes donating more attractive, so you’re more likely to receive higher contributions. No 80G registration? You might lose out on big donations because donors won’t get any tax benefits.
Boosted Credibility: In the NGO world, reputation is everything. With 12A and 80G registrations, your organization isn’t just seen as another charity—it’s recognized by the government as a legitimate, credible entity. This opens doors for grants, partnerships, and collaborations that wouldn’t be possible otherwise.
Access to Government Funds: Do you think receiving funds from the government seems like a good idea? If you do not have 12A and 80G registrations, you will not even be able to enter. As a fundamental qualifying requirement, several government programs need these credentials.
Eligibility for 80G and 12A Registration
Before you rush to apply, your NGO needs to meet certain conditions:
Legal Structure: Your organization needs to be registered as a charitable trust, society, or a non-profit company under Section 8 of the Companies Act.
Charitable Purpose: Your NGO should focus on activities that fall under the category of charity, such as education, poverty relief, medical aid, or environmental protection.
Proper Record-Keeping: The NGO must tightly limit the use of its funds to charitable endeavors, and it must keep accurate and current records.
Documents Needed for 12A and 80G Registration
In order to register under Sections 12A and 80G, a number of documents must be submitted. This is what you require:
12A Registration Documents:
- Form 10A: This is the official application form for 12A registration.
- Incorporation Proof: Copies of the articles of association, memorandum of association, or society registration certificate for your non-profit organization.
- PAN Card: A duplicate Permanent Account Number (PAN) card for the NGO.
- Financial Statements: Audited financial records, either since the inception of the NGO or for the last three years, whichever is shorter.
- Bank Statements: Copies of your bank account statements from the last three years.
- Activity Report: A detailed report on what your NGO has been up to—brochures, photos, pamphlets, whatever you have to show your work.
80G Registration Documents:
- Form 10G: The official application form for 80G registration.
- 12A Certificate: You need to include a copy of your 12A registration certificate when applying for 80G.
- PAN Card: Again, a copy of the NGO’s PAN card.
- Trust Deed/Memorandum: A copy of the trust deed or the memorandum of association and articles of association.
- Landlord NOC: If your NGO operates from a rented space, you’ll need a No-Objection Certificate (NOC) from the landlord.
- Donor List: If applicable, a list of donors along with their PAN details and the amount they’ve donated.
- Activity Details: A report on the charitable activities your NGO has undertaken.
How to Get 12A and 80G Registered
Steps for 12A Registration:
- File the Application: Submit Form 10A to the Commissioner of Income Tax (Exemption) in your jurisdiction. This can be done online.
- Verification: The tax authorities will scrutinize your application and documents. They might ask for more information or clarifications if something isn’t clear.
- Inspection: Sometimes, they might even come to inspect your office and activities to make sure everything checks out.
- Approval: If everything’s in order, you’ll get your 12A registration certificate, which is a one-time thing—no renewals needed unless the authorities cancel it.
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Steps for 80G Registration:
- Submit the Application: File Form 10G with the same jurisdictional Commissioner of Income Tax (Exemption). This is also done online.
- Document Scrutiny: The Income Tax Department will review your submission. They might ask for more documents or explanations if necessary.
- Verification: Like with 12A, they might visit your office to verify your claims.
- Certificate Issuance: Once satisfied, they’ll issue the 80G certificate, which allows your donors to claim tax deductions on their contributions.
Conclusion
Section 80G and 12A registrations for NGOs are non-negotiable in India. They are about more than just checking boxes; they are about increasing the amount of money that stays in your organization, drawing in additional donations, and enhancing its reputation. Getting registered isn’t as difficult as it seems if you have the necessary paperwork and a clear grasp of the steps involved. And your NGO will be in a far better position to actually make an effect once you have those certifications.
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FAQ’s
Without 12A, your NGO’s income gets taxed, which means less money for your cause. With 12A, you skip the tax and keep more funds for your work.
Donors get to reduce their taxable income by the amount they donate. It’s a tax break for them, which makes donating to your NGO more attractive.
These registrations prove your NGO is legit in the eyes of the government. This makes it easier to get grants, partnerships, and donations.
Nope. These registrations are necessary for most government awards. You’re out of the running without them.
Only NGOs registered as a charitable trust, society, or non-profit company under Section 8 can apply.
You’ll need Form 10A, proof of incorporation, PAN card, financial records, bank statements, and a report on your NGO’s activities.
You’ll need Form 10G, your 12A certificate, PAN card, trust deed/memorandum, landlord NOC (if applicable), a list of donors, and a report on what your NGO’s been doing.
In the event that everything checks out, you will receive the certificates after submitting the documents online and maybe undergoing an office visit.