Non-government organisations are promoted by the government because they are working for charitable purposes. Directly or indirectly, they are helping the government while achieving many goals and solving many problems. They are helping the government. There are three types of non-government organisations in India. First is a society which got registered under the Societies Act, second is a trust that needs to be registered under the Trust Act and the last one is section 8 companies incorporated under the Companies Act.
There are many tax benefits or advantages that have been provided to the NGOs under the Income Tax Act. 12a and 80g Registration are two of them. However, the current blog will discuss the important factors of 12a registration in detail. Without getting a 12a registration certificate, one cannot get any kind of tax exemption. Also, without this registration, even if the organisation is working for a charitable purpose, it needs to pay the tax at normal rates. Therefore, to get the tax benefit, one must apply for 12a registration online and while registering, one must consider all the important factors of 12a registration to avoid any kind of mistake while registering.
What is 12a registration?
All types of NGOs are working or run on certain kinds of income. Either it comes from the services or goods NGOs are providing or through the donation. There is some income source for NGOs as well. Without that Income source, this kind of institution cannot do charitable work. But as these institutions are working for philanthropic and charitable works, the government gives them certain kinds of exemption under the Income Tax Act, but to get those benefits or advantages, it is necessary for all the NGOs to register themselves under section 12a of the Income Tax Act while considering all the important factors of 12a registration.
That registration under section 12a of the Income Tax Act with the Income Tax Department is known as 12a registration. After this registration, one will get a registration certificate, and after showing the same, they will get tax exemption under the Income Tax Act 1961. Hence it is always suggested to all types of NGOs to apply for 12a registration online.
Is it Mandatory to get 12a Registration for NGOs?
If, as an NGO, one wants to take tax exemptions under the Income Tax Act of 1961, it is mandatory to take a 12a registration certificate from the Income Tax department. Without this certificate, it is impossible to get the benefit or advantage of tax exemption. Even an NGO has to pay tax with the normal tax rates if it does not have a 12a registration certificate. Hence, while considering the above perspective, it can be said that it is mandatory to get a 12a registration certificate while considering all the important factors of 12a registration for all NGOs. Also, it is not very difficult to get this certificate; one can apply for 12a registration online while sitting at home.
Important Factors of 12a Registration Under the Income Tax Act
There are two very important factors of 12a registration under the Income Tax Act of 1961. These two factors include the documentation and the proper registration procedure. Both of the important factors of 12a registration are given below:
Documentation
Documentation is one of the important factors of 12a registration. While applying, the above registration documents play a very important role. It is not possible to get this registration without completing the proper documentation. Although the registration process is online, there are a lot of formalities one needs to do. Hence, collect all the required documents before one applies for 12a registration online. This will make your registration process smooth and easy. Given below is the list of documents one needs to collect before he or she will apply for 12a registration online in India:
- KYC documents of all the members, partners or directors of the NGO. KYC documents include aadhaar card and PAN card of all the members, partners or directors of the NGO
- Collect one passport-size photograph of all the members, partners or directors of the NGO.
- Business address proof of the registered NGO that can be a trust, society or section 8 company
- Incorporation certificate of the registered NGO that can be a trust, society or section 8 company
- Details of the authorised signatory of the registered NGO that can be a trust, society or section 8 company
- Details of assets and liabilities of the registered NGO that can be a trust, society or section 8 company
- Income details of the NGOs
- Details of the income received by the NGO in the last three preceding years
- MOA and AOA of the NGO that includes trust, society or Section 8 company
- PAN Card of the NGO that includes trust, society or Section 8 company
- List of the donors of the NGO that includes trust, society or Section 8 company
- A copy of Form 10A is necessary
- Book of accounts of the NGO that includes trust, society or Section 8 company
Proper Registration
In the important factors of 12a registration proper registration process comes in second place. Follow the steps given below to complete proper 12a registration in India:
- Visit the portal or website of the Income Tax department to get 12a registration under the Income Tax Act
- Create login credentials and login through the same credentials on the official website of the Income Tax Department
- On the left side of the screen of the homepage, one will get the option of “e-file.”
- Click on the “e-file” option, which is mentioned in the above step
- In the next step out of the various options available, choose the option of “Income Tax Forms”.
- Now click on the available option which is “Income Tax Form”, and then you have to choose or click on the “File Income Tax Form” option.
- After the above step, you will again find three options, out of which you need to choose “Person not dependent on any source of Income.” and select Form 10A out of the various forms available on the screen.
- Fill in the assessment year and then click on the Continue button available on the screen.
- Now you will find the next option on the screen, which is “Let’s get started.” Click on the available option
- Fill in all the required details for the 12a registration certificate as per the requirement.
- Now, the second last stage is to complete the e-verification
- Lastly, submit the form after checking it properly.
- Once the form is submitted, the department will properly verify your application.
- If the department finds everything is up to the mark, you will get the provisional 12a certification.
- Before completing the six months after getting the provisional registration certificate, one also needs to apply for the final registration certificate under section 12a of the Income Tax Act of 1961
Conclusion
In the important factors of 12a registration, documentation and proper registration are very crucial. It is mandatory to apply for 12a registration online in India to get tax benefits under the Income Tax Act of 1961. Fortunately, the process of applying for 12a registration can be done online, making it accessible and convenient to the applicant. 12a registration is a mandatory step for NGOs in India to avail themselves of tax exemptions; hence, one must apply for 12a registration online as soon as possible. The online application process simplifies this crucial registration, but it is essential to gather and submit all the necessary documents to ensure a smooth process and compliance with tax regulations.
As already mentioned, the 12a registration process is a multi-stage process, and there are a lot of formalities involved in it. Even a small mistake can act against you. Therefore, it is always suggested to take expert help so that there will be no chance of mistake while taking 12a registration.
