An NGO is a NON-Profit Organization, which functions independently and is involved in important voluntary activities for society. They can be group-based or individual. NGOs are registered as a society, trust, or Section 8 companies, which depends on the scope of their activities.
If you are a non-profit organization, the registration under Section 12A and 80 G is a must in order avail of Tax Benefits.
80 G and 12A apply only to NGOs or any charitable organizations which:-
- Have no income generation from the business
- It is a charitable trust or a registered society
- It should not use their assets or their income generated for any other purposes other than charity
- Should not be working for any benefit of any particular religion or caste.
As a leading Accounting and Tax Compliance Firm in Pune, we at Digilekha, have complied a list of recent important processes and compliances of 12A and 80 G registrations for non-profit organizations.
What exactly is the 80 G certificate?
The 80 G certificate is issued to a non-profit organization. The objective behind the registration of the 80 G certificate is to ensure more genuine donors for the funding of the NGO. The donor gets the benefit of deduction u/s 80 G (subject to certain limitations) from his Gross Total Income.
The process of the registration of the 80G certificate:-
- The application needs to be submitted to the Commissioner of Income Tax, in the jurisdictional area of the NGO institution.
- Once all the required documents are submitted the on-duty inspector of the income Tax Department inspects the institution.
- The officials can ask for further documents if required.
- On a satisfactory verification, the institution gets the 80 G certificate, which is valid for a lifetime.
The benefits of an 80 G certificate are many such as an increase in the number of donors, an increase in reputation, more government funding, and donors can also save tax.
What exactly is the 12A registration certificate?
A 12A registration is a one-time registration certificate that is granted to the NGO for one-time exemption right after the incorporation.
The process of the registration of the 12A certificate:-
- The institution needs to fill out the application using Form 10A as per the Rules of the 17A Income-tax Act. This application needs to be filed with the Jurisdictional Commissioner of the Income Tax Department.
- Once the form and the other documents are received the Commissioner verifies the authenticity of the organization and the various activities which are carried out in the organization and can order any other additional documents if required.
- Upon a satisfactory report, the Officer will pass an order the grant the 12A registration.
- The validity is granted for a lifetime.
The 12A registration can be revoked at any time if the activities of the organization carried out are against the object of the institution, are not genuine, or are derogatory to society.
The benefits of a 12A registration are the institute can avail of various government schemes and grants the biggest benefit of a tax exemption.
At Digilekha, a premier Tax Firm in Pune, we are your guide in making you aware of the important regulations of the 12A and 80G registrations. For more information call us on the below-mentioned number or email us on the below-mentioned mail id.