These are the basic registration that stands as essential for non-profit organizations which include trusts, section 8 companies as well as societies. Section 12A registration provides for an exemption towards paying income tax and it can be considered by all the NGOs. The benefit arising stands as an exemption, to receive grants and for the recognition of the organization. Section 80G registration further allows the donors to the organization who further claim deduction under the Act and can be considered by the NGOs. It basically encourages the tax benefits, enhances the donors and receives various funding. Both of them play a vital role for the non profit organizations to operate efficiently and further receive the funds for the NGOs.

Here Non profit organization refers to mainly three types of organization which includes trusts which need to be governed by the Trust Act and the next one is societies which are governed by Societies Act and the last one is Section 8 companies which are the part of Companies Act of 2013. These registrations are crucial in order to get exemptions and deductions under the Income Tax Act. Also help NGOs to get donations because the donor will get benefit on the donated amount. Hence all the NGOs must get these two registrations as soon as possible.

Understanding of 12A and 80G Registration in India

Both these registration has been done under the Income Tax Act of India. They are for different purposes. For the better understanding of both of them let's delve deep down into them one by one: 

• Section 12A Registration 

Section 12A of the Income Tax Act provides exemption to all the types of charitable institutions which are basically known as Non Government organizations or NGOs. All the NGOs must be aware about this section because it provides them exemption against the surplus amount. It helps them to save tax which they can use for the benefit of the organization or for achieving the objective of the organization.

• Section 80G Registration 

If as an NGO you want to get donations then you must get this Section 80G certification under the Income Tax Act. This certification helps the donors to get 50% rebate on the donated among which means they can deduct the donated among from their total income which ultimately helps them to get tax benefit. That is why this certification under 80G is really important for all types of Non Government Organizations in India. 

Eligibility Criteria for Registration Under Section 12A 

The registration of religious or charitable NGOs is done under Section 12A as it allows them to claim tax exemptions on the income that they receive from donations. The eligibility criteria that need to be fulfilled to obtain 12A registration are:

• Nature of Organization: Only those NGOs that are completely for charitable or religious purposes are applicable for registration under 12A.
• Charitable Activities: The activities in which the organizations are engaged should be charitable and should fulfill the charitable objectives. The activities conducted by them should not be aimed at generating profits for benefitting any particular group or individual.
• Registration: The registration of the NGOs should be done under appropriate laws.
• Utilization Income: The income or assets of the organization should not be used either directly or indirectly for benefitting its members or any other individual specifically.
• Books and Account Maintenance: Proper management of books of accounts and financial documents must be done by the organization.
• Regular Filing of Returns: Filing of annual income tax returns according to the Section 139 of the ITA should be done timely by the organization.
• No Political Activities: The organization or its members should not get involved in any political activities nor support any political party or candidate.

Eligibility Criteria for Registration Under Section 80G

The registration of charitable or religious organizations under 80G allows their donors to claim tax exemptions on their donations to such organizations. The eligibility criteria that need to be fulfilled for this registration are:

• Nature of Organization: Only those NGOs that are registered societies, trusts and Section 8 companies established for religious or charitable purposes are applicable for 80g registration.
• Registration under Section 12A: The organizations must have a registration certificate under Section 12A after which they become applicable for Section 80G registration.
• Proper use of Income: The governing rules of the organization must explicitly restrict the use of the assets and income and ensure that they are used only for charitable and religious purposes.
• Non-exclusivity of Beneficiaries: The establishment of the company should not be done for the benefit only of a specific religious community or caste. All the needy people irrespective of religion or caste should receive benefits from them.
• Regular Accounting: Proper and regular maintenance of accounts should be done by the organizations. Transparency and accountability must be demonstrated in the use of funds.

Documents Required for 12A and 80G Registration in India 

The documents required for 12A and 80G registration under the Income Tax Act are given below:

• A self-certified original copy of the place of establishment under an instrument of the trust.
• A self-certified document as evidence for the location of the creation of trust under an instrument.
• Self-certified Certificate of Registration including Memorandum of Association/Bye Laws(those which are applicable).
• Copy Of FCRA registration certificate(if registered).
• 2 copies of the annual account report of the trust in the recent three financial years.
• An audit document if the full income without accounting for Sections 11 and 12 exemptions exceeds the non-taxable amount.
• NGO Darpan ID

Process of Obtaining Section 12A and 80G Registration

The below mentioned are the procedure to be followed in order to get the above mentioned registration under the Income Tax Laws: 

Registration Process of Section 12A 

• Prepare Form 10A along with required documents (trust deed, MOA, financial statements).
• Submit the registration application before the Commissioner of Income Tax.
• Await verification and scrutiny by the Income Tax Department.
• Ensure all documents comply with legal requirements.
• Provide details of trustees or governing body members.
• Include activities and objectives of the organization.
• Await assessment of eligibility for Section 12A registration.
• Receive registration certificate if requirements are met.
• Certificate recognizes eligibility for tax exemption.
• Certificate generally valid indefinitely unless revoked.
• Enjoy benefits like tax exemptions on income from charitable activities.
• Beware of potential revocation if non-compliance is detected.

Registration Process of Section 80G

• Confirm eligibility criteria for charitable purposes under Section 80G.
• Prepare Form 10G with accurate details and necessary documents.
• Submit Form 10G to the Income Tax Department.
• Department verifies the application and scrutinizes documents.
• Field inquiry may be conducted for validation.
• Department decides to approve or reject based on scrutiny.
• If approved, the department issues a registration certificate under Section 80G.
• Certificate specifies the validity period (often multiple years).
• Communicate tax benefits to potential donors, specifying deductible limits.
• Fulfill annual compliance obligations to maintain Section 80G status.
• Renew registration before expiry if required.
• Publicize Section 80G registration to attract donors seeking tax benefits.
• Be prepared for potential monitoring and audits by tax authorities.
• Maintain and retain all relevant records and documents.
• Understand conditions that could lead to revocation of Section 80G status.

Benefits of 12A and 80G Registration in India 

The benefits of registration under Section 12A and 80G are discussed below for the better understanding purpose: 

• Tax Exemption for Donors

If donation has been made to any non charitable organization and if such organization has registration under section 80G of the Income Tax Act, then such donor will get exemption on tax liability of that amount and he or she can deduct that from his total income which saves his tax among. 

• Enhanced Trust and Credibility

Any Non Government Organization which has these two registration called section 12A and 80G, their trust as well as credibility in the market will automatically increase. Donors prefer to trust such NGOs for the donation as well as other causes. 

• Increased Potential of Fundraising

Donors always prefer to donate money for such NGOs who are having these two registrations called 12A and 80G. This is because their personal gain is also involved and they can achieve the same only if the organization has these registrations. Without 80G certification a donor cannot claim deduction on the donated amount. Hence we can say that these registrations increase the potential of fundraising among the NGOs. 

• Access to Various Government Grants

If any Non Government Organization wants to get the benefits of various kinds of government grants then they must have proper documentation. In this documentation these two registration also fall hence one muse takes 12A and 80G registration in order to get the various government benefits. 

• Long-term Sustainability

In order to gain the long term sustainability you have to take or obtain these two registration under the Income Tax Act. They help the organization to run in the long term. 

What is the validity of 12A and 80G certificates?

The validity of the registrations under Sections 12A and 80G granted for the first time will be provisional and valid handiest for three years. The NGOs can apply for the renewal either six months before the expiry or within six months of the conduction of activities. After renewal, a grant of five years is given to them. This is how this registration works. First temporary registration has been provided after which the applicant needs to get the permanent registration. The entire process of registration as well as renewal is online and you may without problems whole the same with the help of an expert professional marketing consultant.

Why to Choose Whizseed for 12A and 80G Registration? 

Registration under Section 12A and 80G plays a crucial part in obtaining the benefits which further acts as a helping hand towards the registered party. These both sections play a crucial role which should be followed to receive fundings as well as to get exemptions for the taxing authority. Hence in order to get the same you should consult an expert like Whizseed who can make your work easy and less expensive. We have a team of experts who are experienced in obtaining 12A and 80G registration, thus we can help you out with our best resources. Consequently you must choose Whizseed for the registration of 12A and 80G under the Income Tax Act.