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NGO can avail income tax exemption by getting itself registered and complying with certain other formalities, but such registration does not provide any benefit to the persons making donations. The Income Tax Act has certain provisions which offer tax benefits to the “donors”. All NGO’s should avail the advantage of these provisions to attract potential donors. Section 80G is one of such sections. If an NGO gets itself registered under section 80G then the person or the organization making a donation to the NGO will get a deduction of 50% from his/its taxable income. The NGO has to apply in Form No.10G to the Commissioner of Income Tax for such registration. As per Circular 7/2010 dated 27.10.2010 issued by the CBDT, all Trusts enjoying exemption u/s 80G as on 1.10.2009 and other Trusts obtaining 80G certificate after 1.10.2009 shall continue to hold and enjoy the same for perpetuity unless revoked by the Income Tax Authorities.
  • Requirements for the eligibility of 80G Certificate:

    1. NGO should have principal objective for charitable purposes and entire, incomes should be from donations. If in case, NGO has a business income then the trustee of an NGO should separate books of accounts to ensure that NGO should not divert donations received for the purpose of such business.
    2. Bylaws of the NGO must contain that spending the income or assets should be exclusively for the purpose of charity.
    3. NGO should not be formed with the benefit of a particular religious community or caste.
    4. Proper books of accounts of the NGO should be maintained, including its receipts and expenditures.
    5. Mandatory registration of NGO’s bye laws

    Our services for obtaining 12A & 80G certificate:

    1. Application drafting for Section 12A license
    2. Application drafting for 80G exemption certificate
    3. Follow-up for approval from Income tax commissioner
    4. End to end follow-up with tax authorities
    5. Take appropriate action for requisite compliance for NGO.
  • Documents required from Trust/NGO for 12A & 80G certificates.

    1. Dully filled in Form – 10A for registration u/s 12A registration
    2. Dully filled in Form – 10G for registration u/s 80G registration;
    3. Registration Certificate & MOA/Trust Deed (two copies–self attested by NGO head);
    4. NOC from Landlord (where registered office is situated);
    5. Copy of PAN card of NGO;
    6. Photocopy of electricity Bill / House tax Receipt /Water Bill;
    7. Evidence of welfare activities carried out & Progress Report since inception or last 3 years;
    8. Books of Accounts, Balance Sheet & ITR (if any), since inception or last 3 years;
    9. List of donors along with their address and PAN;
    10. List of governing body board of trustee’s members with their contact details;
    11. Deed for verification Original RC and MOA /Trust;
    12. Authority letter in favor of NGO Factory;
    13. Any other document/ affidavit / undertaking information asked by the Income Tax department.

Questionnaire on registration for 12A & 80G certificate

What is section 12-A of Income Tax Act.?

  1. Income of an organization is exempted if NGO has 12-A registration. All income shall not be taxable after 12-A registration. This is one time registration.
  1. When an organization can apply for registration under section 12A and 80G of Income Tax Act?
  2. A. Application for registration under section 12A and 80G can be applied just after registration of the NGO.
  1. Where to apply for registration under section 12A and 80G of Income Tax Act?
  2. A. Application for registration under section 12A and 8OG can be applied to the Commissioner of Income-tax having jurisdiction over the institution.

Can both the applications under section 12A and 80G of Income Tax Act be applied together?

  1. A. Yes, both applications can be applied together and it can also be applied separately also. If some organization is willing to apply both applications separately, then application for registration u/s 12A will be applied first. Getting 12A registration is must for applying application for registration u/s 80G of Income Tax Act.
  1. Generally, what is the timeline for getting registration under section 12A and 80G of Income Tax Act?
  2. A. If application for registration under section 12A and 80G will be applied through NGO Factory, it should take 3 to 4 months.

An NGO can apply for 12A certification and 80G certifications just after the registration of an NGO. If an organization has obtained certification under section 80-G of Income Tax Act then donors of that NGO can claim exemption from Income Tax.

  1. Key elements for registration of Trust/NGO/Society in India:
  1. There are limited key elements for forming NGO/Society/Trust under various laws which are described below:
  • Vision
  • Structure
  • Governing body
  • Name
  • Location & area of operation
  • Draft by-laws – Following documents will include by-laws in case of different business models;
  • Trust Deed in case of Trust
  • Memorandum of Association By-laws in case of Society
  • Memorandum and Articles of Association (MOA& AOA) in case of Section 8 Company.