Introduction:-
Non-Governmental Organizations (NGOs) play a vital role in addressing social issues and contributing to positive change in society. To facilitate their work, NGOs can benefit greatly from obtaining 12A and 80G registrations. These registrations confer tax benefits to donors and ensure the financial sustainability of the organization. In this comprehensive guide, we will walk you through the procedures for 12A and 80G registration, providing a roadmap for NGOs looking to make a lasting impact.
Understanding 12A Registration:-
What is 12A Registration?
12A registration is a provision under the Income Tax Act, 1961, which grants tax exemption to NGOs on their income. It allows them to retain the full amount of donations without being subject to tax deductions.
Procedure for 12A Registration:
1.Eligibility Criteria:
NGOs must be registered under applicable state laws, such as a Trust, Society, or Section 8 Company, before applying for 12A registration.
2. Application Filing:
Submit an application in Form 10A to the Commissioner of Income Tax along with the following documents:
- Copy of the NGO's registration certificate
- Memorandum of Association (MOA) and Articles of Association (AOA)
- Copies of accounts and balance sheets for the last three years (if available)
3. Scrutiny by IT Department:
The Income Tax Department will review the application and may seek additional information or documents for verification.
4. Issuance of Certificate:
If satisfied, the Commissioner of Income Tax will issue the 12A registration certificate, granting tax exemption to the NGO.
Understanding 80G Registration:-
What is 80G Registration?
80G registration enables NGOs to issue tax-deductible receipts to their donors, encouraging philanthropic contributions.
Procedure for 80G Registration:
1.Eligibility Criteria:
An NGO seeking 80G registration must have obtained 12A registration and maintain proper books of accounts.
2. Application Submission:
File an application in Form 10G to the Commissioner of Income Tax, providing details about the NGO's activities, financials, and compliance with legal requirements.
3. Evaluation by IT Department:
The Income Tax Department will scrutinize the application, verifying the NGO's eligibility and compliance with 80G regulations.
4. Issue of Registration Certificate:
Upon approval, the Commissioner of Income Tax will issue the 80G registration certificate. This certificate is typically valid for a specified period, after which it must be renewed.
Conclusion:-
Obtaining 12A and 80G registrations is a significant milestone for NGOs, as it not only provides tax benefits to donors but also enhances the organization's credibility and transparency. Following the outlined procedures diligently and maintaining compliance with relevant laws is crucial. NGOs should also consider seeking professional guidance to navigate any complexities in the registration process. With 12A and 80G registrations, NGOs can unlock greater financial support, ultimately empowering them to make a more substantial and sustainable impact on society.