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
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