Introduction:-
Establishing a trust is a noble endeavor aimed at making a positive impact on society. However, to ensure sustainable operations and attract donors, obtaining essential registrations like 12A and 80G is crucial. In this article, we will guide you through the process of acquiring 12A and 80G registration for trust, highlighting their significance and the steps involved.
Understanding 12A Registration:-
What is 12A Registration?
12A registration is a vital certification granted by the Income Tax Department of India. It provides exemption to charitable and religious trusts from paying income tax on their surplus income, ensuring that more funds are available for their philanthropic activities.
Eligibility Criteria
To be eligible for 12A registration, a trust must:
- Be a genuine and active charitable organization.
- Apply within one year from the date of its establishment.
Application Process
- Gather Necessary Documents: Prepare a set of required documents, including trust deeds, audited accounts, and a copy of the trust's PAN card.
- Fill Form 10A: Submit Form 10A online through the e-filing portal of the Income Tax Department. Provide accurate information about the trust, its activities, and financial details.
- Verification by Commissioner: The application is reviewed by the Commissioner of Income Tax. If satisfied, the registration is granted.
Understanding 80G Registration:-
What is 80G Registration?
80G registration enables donors to claim a deduction for the amount donated to the trust while calculating their taxable income. This acts as an incentive for individuals and organizations to contribute to the trust's activities.
Eligibility Criteria
For 80G registration, the trust must:
- Have obtained 12A registration.
- Ensure that its activities do not involve any form of profit distribution.
Application Process
- Gather Required Documents: Prepare documents including the trust's audit reports, accounts, and a copy of the PAN card.
- Fill Form 10G: File Form 10G through the e-filing portal of the Income Tax Department. Provide detailed information about the trust's activities and financials.
- Verification by Commissioner: The application is scrutinized by the Commissioner of Income Tax. If satisfied, 80G registration is granted.
Linking 12A & 80G Registrations:-
Obtaining 12A registration is a prerequisite for applying for 80G registration. Therefore, ensure that your trust has acquired 12A certification before proceeding with the 80G application.
Conclusion:-
Acquiring 12A and 80G registrations for your trust is a critical step towards ensuring its financial sustainability and attracting donors. By navigating the application processes effectively, you not only avail tax benefits but also inspire confidence in potential contributors. Remember, compliance with all legal and financial regulations is essential to maintain the trust's credibility and uphold its charitable objectives.