Documents Required for Section 12A and Section 80G Registration
Introduction
Registering under Section 12A and Section 80G is essential for NGOs and charitable organizations to get tax exemptions and attract donations. Section 12A helps them avail income tax benefits, whileSection 80G registration allows donors to claim tax deductions. To apply, organizations need specific documents like PAN, trust deed, and financial statements. This guide will walk you through the documents required for Section 12A and 80G registration and the step-by-step process to get approved.
What is Section 12A?
Section 12A of the Income Tax Act allows NGOs, trusts, and charitable organizations to get tax exemptions on their income. Once registered under Section 12A, the organization does not have to pay income tax on the funds it receives for charitable purposes. This registration is a one-time process and is essential for organizations that want to operate as tax exempt entities and also apply for Section 80G benefits to attract tax deductible donations.
What is Section 80G?
Section 80G of the Income Tax Act allows donors to claim tax deductions on donations made to registered NGOs, trusts, and charitable institutions. This encourages more people to contribute to social causes while reducing their taxable income. To qualify, the organization must haveSection 80G registration, ensuring that its activities are genuinely charitable. The deduction percentage varies, with some donations eligible for a 50% or 100% tax benefit, depending on government rules.
Documents required for Section 12A registration
To register under section 12A, you first have to file Form 10A along with below mentioned documents.
- PAN card of the trust or organization
- Certificate of incorporation.
- Copies of MOA and AOA (If applicable)
- Trust deed
- The Audited annual Financials for the last three years (if the organization is a trust)
- List of trustees/ members/ directors of the organization.
Documents required for Section 80G registration
- Registration certificate of company, trust, or society.
- Details of activities since its corporation.
- Digital signature of one of the directors.
- Section 12AB certificate.
- Required to fill out form 10A
Benefits of Section 12A and Section 80G registration.
- Tax Savings for NGOs : Section 12A helps NGOs to save money by making their income tax-free, allowing them to use more funds for their charitable work.
- Encourages More Donations : With Section 80G registration, donors get tax deductions, which motivates them to contribute more.
- Increases Credibility : A registered NGO gains trust and recognition from donors, government bodies, and corporate sponsors.
- Eligibility for Government and CSR Grants : Many government schemes and corporate donations require NGOs to have both Section 12A and Section 80G registration.
- Long Term Financial Stability : NGOs can focus on their mission without worrying about high tax liabilities.
- Easy Fundraising : More people and organizations are willing to donate to NGOs that offer tax benefits under Section 80G.
- Legal Compliance : Having Section 12A and Section 80G registration ensures the NGO is legally recognized and follows tax laws properly.
Importance of registration under section 12A and Section 80G
Registering under Section 12A and Section 80G is essential for NGOs to operate efficiently and attract more donations. Section 12A registration ensures tax exemptions on income, while Section 80G registration allows donors to claim tax benefits, encouraging more contributions. This not only helps organizations save funds for charitable activities but also enhances their credibility and eligibility for government funding.
- Tax Exemption for NGOs : Section 12A registration allows charitable organizations to claim tax exemptions on their income, reducing their financial burden.
- Ensures Compliance with Tax Laws : Proper registration helps NGOs stay legally compliant and avoid unnecessary tax liabilities. As per the latest rules, NGOs must renew 12A and 80G registrations every five years.
- One Time Registration Benefit : Section 12A registration is a one time process, ensuring long-term tax benefits without frequent renewals.
- Better Financial Management : NGOs can utilize more funds for their charitable work instead of paying taxes, ensuring maximum impact.
Conclusion
Registering under Section 12A and Section 80G is crucial for NGOs and charitable organizations to avail tax exemptions and attract more donations. It not only helps in financial management but also enhances credibility and eligibility for government and CSR funding. By ensuring proper documentation and compliance, organizations can maximize their impact and contribute effectively to social causes.
Suggested Read :
Exemptions under Section 80G and 12A / 12AA
How to apply for Section 12AA registration?
Renew a Trust License in India
Section 80G of Income Tax Act
Form 10BD vs Form 80G
FAQ
2. What documents are needed for Section 12A registration?
You need the NGO’s PAN card, registration certificate, trust deed, MOA & AOA (if applicable), financial statements, and a list of trustees or directors.
2. What are the key documents required for Section 80G registration?
You need the Section 12AB certificate, registration certificate, activity details, digital signature of a director, and Form 10A/ 10AB.
3. Is it mandatory to have a PAN card for Section 12A and Section 80G registration?
Yes, having a PAN card for your NGO, trust, or society is compulsory for registration.
4. Do I need past financial records for Section 12A and Section 80G registration?
Yes, If your NGO has been operating, you must submit financial records of the last three years.
5. Can I apply for Section 12A and Section 80G together?
Yes, you can apply for both registrations simultaneously by submitting the required forms and documents.
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