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80G And 12A Registration
80G And 12A Registration
Non- Government Organizations (NGOs) in India rely primarily on donation to manage their day to day operations. NGOs are required to get themselves registered under Section 80G and section 12A of the Income Tax Act to claim tax exemptions available to both donors and recipients. 80G Registration comes under section 80G of the Income Tax Act that provides benefit to the donor of an NGO whereas 12A registration will benefit an NGO to get an organization exempted from Income tax. Both these registration typically needs to be done by an NGO post its incorporation. The process is too complicated and time consuming.
Moreover as per recent notification, all the existing NGOs registered under these 2 sections are required to re-register themselves under section 80G and 12AA to enjoy the tax exemptions. Further Form CSR-1 is required to be registered if an NGO seeks CSR funding.
DSC are used for multiple online transactions like annual return filing, company Incorporation, ITR filing, E-tenders etc. There are mainly 3 types of Digital Signatures – Class 1, Class 2 & Class 3. You can obtain your DSC from Legalite at minimum price Pan India.
80G and 12A registration online
Corporate & Partnership Tax Services
Both 8OG and 12A registration applies only to NGOs and Charitable organizations. Professionals from Legalite will help you to register for 8OG and 12A in 4 easy steps.
Estate & Trust Tax Services
- Application drafting for section 12A License
- Application drafting for 8OG exemption certificate.
- Approval from Income Tax Commissioner
- End to end follow-up with tax authorities
What is 80G Certificate?
Mergers & Acquisitions
80G certificate is issued to non-profit organizations, Section 8 company or a charitable trust by the Income Tax Department. The major objective behind the 80G certificate is to attract maximum donors to donate funds to such organizations mentioned above. The donar avails income tax exemption on 50% of the amount contributed to an NGO as the donar is allowed to deduct their donations from their Gross Total Income (GTI). To avail deduction under section 80G, the donar needs to attach certain proof in the form of receipt against the donation that is issued by the NGO consisting of name, date and PAN of the organization.
Benefits of 80G Registration
- Enhances credibility of an organization
- Donors avail of the tax benefit
- Attracts more donors to donate
- Eligibility to get the government funds
- Organizations can avail hassle-free foreign contributions
Types of Digital Signature Certificate
At Legalite we provide only Class 3 DSCs, although we can provide information regarding all the DSCs.
Class 1 – The Class 1 DSC is majorly issued to businesses, individuals to merely confirm its user name and e-mail id as mentioned in the customer database.
Class 2 – The Class 2 DSC has been discontinued post 1st January,2021. Moreover for all the purposes including Income tax, GST, ROC filing, TDS, tenders etc, the guidelines state that Class 3 DSC should be use in place of Class 2 and the Class 1 DSC is no longer accepted.
Class 3 – The Class 3 DSC has been mandated for all types of transactions in India.
80G Registration Process
80G Registration process consists of the following steps:
- Application has to be filed in form – 1oA of the Income Tax Act
- Once the application and the documents are submitted, the application will be reviewed by the Income Tax Commissioner.
- The officials may demand additional documents and information
- On satisfactory verification and scrutinizing of documents as well as the office of the NGO, the 80G certificate is issued to the organization.
What is 12A Registration?
Post discussion on 80G and its benefit, now its time to discuss briefly on 12A registration and 12A registration process.
Trusts, NGOs, and other Section 8 companies avail the benefit of tax exemption under the Income Tax Act by virtue of Section 12A registration. An NGO not registered under this section cannot enjoy the privilege of tax exemption and would have to pay income tax just like other companies during the year.
Benefits of 12A Registration
- Tax exemption benefit to organization
- Provision to gain grants from the government increases substantially
- Registration certificate serves as a valid proof for the purpose of its existence.
- FCRA benefits
Documents required for 80G & 12A Registration
- Audited Financial Statement and Income Tax Return of the organization for the preceding three financial years.
- Incorporation Certificate/ Registered Trust Deed of a trust / Society Registration Certificate in case of society.
- NGO DARPAN (if available)
- Pan Card of the organization
- Three year bank account statement of the organization
- Copy of Utility Bills – Electricity bills, Water Bills or House Tax receipt.
- Lists of welfare activities being carried out by the organization.
New terms of Registration and Re-registration under section 80G and 12A
- Provisional Registration Certificate will be issued by the Income Tax Department to newly established NGOs, Societies, trusts applying for 80G and 12A Registration. It becomes due for renewal after expiry of 3 years.
- For Re-Registration, tenure will be revalidated for a period of 5 years by the Income Tax authorities and requires renewal after completion of every 5 years.
Re-validation under section 12A and 80G
Overall Process:
The overall re-validation process roughly takes about 2-3 months and the application is made to Income Tax Commissioner within 10 days from the date of submission of the required documents. It holds a time validity of 5 years and requires renewal after every 5 years.
Documents required for re-validation
- Audited Financial Statement and Income Tax Return of the organization for the preceding three financial years.
- Incorporation Certificate/ Registered Trust Deed of a trust / Society Registration Certificate in case of society
- Lists of welfare activities being carried out by the organization.
- NGO DARPAN ID (if available)
- FCRA ID (if available)
- Copy of the 80G and 12AA certificate previously received.
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