In India, there are a total of three types of NGOs that include society, trust and section 8 company. It is a well-known fact that when you register an NGO that is a non-government Organisation in India, there are a lot of benefits attached to it, but to get these benefits, one has to complete the procedure for 80g and 12a registration. Out of the many benefits that NGOs get in India under various laws, tax exemption and deduction are two of them. NGOs are mostly working on the donations offered by the donors. Without completing the procedure for 80g and 12a registration, one cannot get the benefits of tax deduction and exemption under the Income Tax Act. Hence one must get registration under both the sections.
What is 80g registration?
There are a lot of people who donate to non-government organisations like trust, society or Section 8 companies in India. Under section 80g of the Income Tax Act, it has been given that the amount which is donated by the donor to any such organisation that is a non-government organisation will be exempt up to 50% tax and can deduct such amount from the gross total income of the company. But to get this exemption, it is necessary that an NGO must get the 80g registration. Only those NGOs which are an 80g certificate are eligible to take benefit of this section. Any donor who wants to claim tax deduction through this must have to show a stamped receipt of the donation. That receipt must have the name of the donor, the date of the donation and the PAN Card of the organisation.
What is 12a Registration?
An NGO is a type of entity that is involved in activities that are for the charitable purpose. Because of their objective, there are various benefits offered to an NGO, one of which is tax exemption under the Income Tax Act. Any non-government organisation, whether it is a trust society or Section 8 company, that wants to take tax exemption needs to get 12a registration mandatorily. Any NGO that does not have registration under section 12a of the Income Tax Act cannot claim tax exemptions. Even such NGOs have to pay the tax with the normal tax rates without any exceptions. Hence to take benefit or advantage of tax exemption, an NGO must take 12a registration.
How to Obtain 80g and 12a registration in India?
To complete the procedure for 80g and 12a registration in India, one must be a registered NGO in India. The registration procedure for 80g and 12a registration in India is an online procedure that one completes while sitting at home. To get the certification or registration under 80g or 12a, one must have to complete the procedure for 80g and 12a registration and must fulfil the following criteria:
- NGOs that are taking the above registration must not have any income from any kind of business
- They must be an organisation that is working for a charitable purpose like trust, society or Section 8 company registered under the Companies act
- These organisations that are completing the procedure for 80g and 12a registration must not be using their assets or income for any purpose other than making charity
- For obtaining the above-mentioned registration and complete the procedure for 80g and 12a registration, it is necessary to maintain books of accounts that can show the receipt of the donation
- The amount of donation must not be used other than the objective or purpose of the NGO
Procedure to get 80g Registration in India
Follow the steps given below to get the 80g registration in India:
- Visit the website or portal of the Income Tax department
- Create Login credentials and login through the same on the official website of the Income Tax
- On the left side of the home page, the option of “e-file” will be found
- Click on the “e-file” option
- Now out of the various options available, choose the “Income Tax Forms” option.
- After clicking on the “Income Tax Form”, one has to choose or click on the “File Income Tax Form” option
- At this stage, you will again find three options, out of which you need to choose “Person not dependent on any source of Income.”
- Select Form 10A out of the various forms available
- Fill in the assessment year and click on the Continue button
- The moment you choose or click on the continue button, you will find the next option on the screen, which is “Let’s get started.” Click on the same option
- Now fill in all the required details for the 80g registration
- Then, complete the e-verification and submit the form
- After that, the department will verify your application, and if you find everything is up to the mark, you will get the provisional 80g certification
- Before completing the six-months after getting the provisional registration, one also needs to apply for the final registration certificate under 80g
Procedure to get 12a Registration in India
Follow the steps given below to get 12a registration in India:
- Visit the portal or website of the Income Tax department and create login credentials. Login through the same credentials on the official website of the Income Tax
- On the left side of the home page, the option of “e-file” will be found; click on the “e-file” option
- Now out of the various options available, choose the “Income Tax Forms” option. After clicking on the “Income Tax Form”, you have to choose or click on the “File Income Tax Form” option.
- At this stage, 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.
- Fill in the assessment year and click on the Continue button. The moment you choose or click on the continue button, you will find the next option on the screen, which is “Let’s get started.” Click on the same option and fill in all the required details for the 12a registration
- Then, complete the e-verification and submit the form. After that, the department will verify your application, and if you find everything is up to the mark, you will get the provisional 12a certification.
- Before completing the six-months after getting the provisional registration, one also needs to apply for the final registration certificate under 12a
Conclusion
To get the benefits as an NGO as well as a donor under section 12a and 80g of the Income Tax Act, NGOs must take certification under 12a and 80g of the Income Tax Act. The procedure for 80g and 12a registration is very similar. Only need to complete that by visiting the official website of the Income Tax. First, one has to take provisional registration, and then only one is eligible to get final registration under the 80g and 12a of the Income Tax Act.
The procedure for 80g and 12a registration needs to be completed by every non-government organisation working with the charitable purpose. Without such registration, one cannot take the various tax benefits available to the NGOs and the donors who donate the money to such organisations. These registrations under sections 80g and 12a are beneficial for both the donor and the NGO. Hence, one must obtain this registration to obtain various available benefits to the NGOs and donors.
