NGO/NPO Annual Filing Archives

What is 12A and 80G? Key difference between 12A and 80G in India Introduction Section 12A and 80G of the Income Tax Act are important for non-profit organizations. Every trust, society, or institution must register under these sections to get tax benefits. The key difference between 12A and 80G is that 12A provides tax exemption to NGOs on their income, whereas 80G allows donors to claim tax deductions on their contributions. This means that registration under 12A saves tax for the organization, and registration under 80G encourages more donations by giving tax benefits to donors. Understanding the difference between 12A and 80G is important for both non-profits and their contributors. What is Section 12A? NGOs, charitable trusts, and Section 8 companies work to help people without aiming for profit. To get tax benefits, these organizations need to register under Section 12A. Only organizations involved in charitable activities can apply for 12A registration. This helps them save on taxes and continue their good work. 12A registration is a prerequisite for 80G registration. Who can apply for it? If you want to start a charitable trust in India, you must register it under Section 12A. Any group involved in charitable activities should apply for 12A registration. What are the benefits of 12A? Tax Exemption: Organizations with a 12A certificate do not have to pay income tax on their earnings. Without this registration, they cannot enjoy this tax benefit. Grants from Various Sources: A registered trust or society can receive funds from government, private, and international organizations. This improves their credibility and financial support. Proof of Existence: The 12A certificate serves as legal proof that the organization exists. It also helps in securing grants or loans from the government. Wider Recognition: NGOs and societies with a 12A certificate gain more recognition for their charitable activities, making it easier to attract support. We provide online 12A registration and 80G5 registration services, ensuring tax exemption approvals for NGOs with compliance support. What is 80G? When an NGO registers, it gets tax benefits, but donors do not. To encourage donations, the Income Tax Act provides tax benefits to donors under Section 80G. This section allows donors to claim deductions on their taxable income for donations made to eligible organizations. The main goal of 80G is to support organizations involved in social or cultural development activities. Who can apply for it? Below mentioned entities must register under section 80G. Non-Governmental Organizations (NGOs) Charitable trusts or groups Section 8 companies Charitable or religious institutions with no-profit purpose What are the benefits of 80G? Tax Benefits for Donors: If a trust or organization has an 80G certificate, donors can claim tax deductions on their taxable income for the donations they make. Improved Credibility: Having an 80G certificate increases an organization’s credibility and goodwill, attracting more donors who trust the NGO’s work. More Donors: Since 80G offers tax benefits, it encourages more people and businesses to donate, knowing they can claim deductions on their taxable income. Transparency and Accountability: To maintain 80G registration, organizations must follow transparency and reporting standards. This builds donor trust and ensures accountability. Easier Access to Government Funds: NGOs with an 80G certificate are more likely to receive government grants and funding, as it proves their credibility and eligibility. Stronger Reputation: With government support and increased donations, an NGO gains a better reputation among the public, making it easier to attract more support. Key difference between 12A and 80G Below table highlights the difference between Section 12A and 80G: Basis Section 12A Section 80G Purpose Provides tax exemption to NGOs and chari-table organizations. Offers tax deductions to donors Beneficiaries Helps the NGOs save on income tax. Helps donors reduce their taxable income. Eligibility Applicable to NGOs, charitable trusts, and Section 8 companies engaged in non-profit activities. Applicable to donors to registered charitable organizations. Tax Benefit The organization is exempted from paying income tax. Donors can claim deductions on their taxable income for donations made. Encourages Supports NGOs to retain more funds for charitable activities. Encourages more donations by offering tax benefits to donors. Conclusion Section 12A and 80G are essential for charitable organizations to receive tax benefits and attract more donors. 12A registration helps organizations save on income tax, while 80G registration encourages donations by offering tax deductions to donors. Understanding the difference between 12A and 80G is important for non-profits looking to maximize their financial resources. Proper registration under these sections ensures long-term sustainability and growth for charitable organizations. Suggested Read : How to Download 12A and 80G Certificate? Section 12AB and 80G Registration Renew a Trust License in India Exemptions under Section 80G and 12A / 12AA Documents Required for Section 12A and 80G Registration FAQ Section 12A registration is important because it allows NGOs to get tax exemptions on their income. Without this registration, an NGO has to pay income tax just like any other organization.Section 80G benefits donors by allowing them to claim deductions on their taxable income for donations made to registered NGOs. This encourages more people and businesses to support charitable causes.Yes, an organization can apply for both 12A and 80G registration. 12A helps the NGO save on taxes, while 80G encourages donations by offering tax benefits to donors.NGOs, charitable trusts, Section 8 companies, and non-profit religious or educational institutions can apply for 12A and 80G registration if they engage in charitable activities.The approval process for 12A and 80G registration can take a few weeks to a few months(1 to 1.5 months), depending on document verification and processing by the Income Tax Department.

NGO/NPO Annual Filing

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