12A and 80G Registrations

12A and 80G Registration – A step forward for your NGO to start working

NGOs in India can be formed either through Public Trust Act or Societies Registration Act or as a Section 8 Company for Charitable or any social welfare work. However, the govt. of India provides tax exemptions to assist them with raising funds.
NGOs are primarily rely on donations to support their functioning. With 12AB Registration, all the income earned by the NGO is exempted from tax and NGOs can utilize all earnings in promoting its objectives. Whereas, with 80G Registration, the tax on the donations offered by the donors for the upliftment of the society is exempted.
However, for 12A and 80G Registrations for NGOs, govt. has set some strict criteria or eligibility to apply for them:
• Promoters of the NGO must not earn money from the activities of the NGO
• Must be registered as a charitable trust, society or Sec 8 company
• Must not use their assets or income for anything other than charitable purposes.
• Proper book of accounts should be maintained.
• Promoters or body members of the NGO should not be involved in any improper use of the funds.
• Such organisations must not work for a specific caste or religion.
• Separate book of accounts should be maintained for the earning of the NGO and Collections from the donations.

12A and 80G – Broadening the scope of an NGO.

Though tax exemptions for both NGOs and its donors are the direct benefits of the 12A and 80G Registrations, these registrations actually open up so many options for an NGO to go far to achieve its social objectives. Some of them are:
• Tax exemptions for donors attract more funds for the NGO as donors are attracted by the benefits they are getting through a donation.
• 12A and 80G are the pre-requisites for government agencies, grants, national and international agencies for funds to apply for the funding.
• Since, more donors are attracted for charity purpose as that amount is exempted from Tax, this broadens the scope of the NGO’s mission as more donations are now available for charity.
• Only 12A and 80G registered NGOs are allowed to accept International funding, with exceptions available under the Foreign Regulation Act, 2010 (FCRA).
• With 12A and 80G Registration, an NGO gets more operational value and status.

Documentation for 12A and 80G Registration

Documents required for 12A and 80G Registration are:
• PAN cards of Directors/Trustees/Society members
• Aadhar Cards of the Directors/Trustees/Society members
• Self-certified copy of trust deed/society deed/incorporation certificate.
• Self-certified copy of sec 8 license
• Self-certified copy of MOA and MOA for society/section 8 company
• Audit Reports of all years since incorporation of the Section 8 NGO/Trust/Society.
• A complete list of welfare activities.
Special documents on case to case basis:
• Self-certified copy of registration under FCRA, if the applicant is registered under FCRA.
• Self-certified copy of existing order of registration under 12A/12AA/12AB, whatever applicable.
• Audit reports of the business for three years immediately prior to the year in which the application is made, where a business undertaking is held by the organization under section 11(4A).
• Self-certified copy of the documents showing/evidencing modifications or adoptions of the objects, if applicable.
• The details of the Darpan Registration, if the organization is registered under Darpan Portal.

Validity of 12A and 80G Provisional Approvals

Income Tax Department issues Provisional Certificates for the registrations in 3 – 4 weeks after receiving proper application.
• Newly established NGOs are given provisional registration for 3 years. It becomes due for renewal either upon commencement of activities or upon completion of 3 years. Renewal should be done 6 months prior to expiry.
• For Re-registration, the tenure is revalidated for a period of 5 years till further renewal.

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