80G & 12A

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What Is an 80G Certificate?

An 80G certificate is granted to non-governmental organizations (NGOs), such as Section 8 Companies or charitable trusts, enabling them to receive financial contributions that are tax-deductible for the donors. When individuals donate to these certified charities, they can deduct the donation amount from their total taxable income, thus receiving tax exemptions. To claim this exemption, donors must present a donation receipt that includes details such as the donation amount, date, and the institution’s PAN.

About 12A Registration

NGOs involved in charitable and nonprofit activities generate income, which is subject to taxation unless they are registered under Section 12A of the Income Tax Act. Trusts, NGOs, and Section 8 Companies can obtain a one-time tax exemption through this registration. Organizations with Section 12A registration are exempt from paying tax on their surplus income, promoting the financial sustainability of their charitable activities.

Benefits of Section 80G and 12A Registration

  1. Tax Exemption: NGOs or societies with 12A registration are exempt from paying taxes, enabling them to direct more funds towards their charitable activities. The 12A certificate is essential for claiming this tax exemption.
  2. Proof of Existence: The 12A certificate serves as a legally binding declaration of the entity’s registered status, providing the necessary documentation to secure loans or grants from the government.
  3. Increased Contributions: Having Section 80G and 12A certification enhances the reputation of the NGO or society, attracting more donors. Donors benefit from tax exemptions on their contributions, encouraging more donations.
  4. Tax Benefits for Donors: Donors can reduce their tax liabilities by contributing to NGOs with 80G certification, incentivizing charitable giving while fulfilling their tax obligations.
  5. Government Support: NGOs and societies with these certifications are more likely to receive grants and funding from the government, supporting their philanthropic efforts.

How to Get 80G Registration: A Step-by-Step Guide

  1. Prepare Your Paperwork: Gather all necessary documents and submit a formal request for an 80G certificate to the Commissioner of Income Tax (Exemption) in your region, following the guidelines set by the governing council.
  2. On-Site Examination: After submitting the required forms and paperwork, the Income Tax authorities conduct an on-site examination to assess the validity of your application.
  3. Document Verification: If any discrepancies or missing documents are identified during the examination, the income tax officials may request additional proofs or documentation to complete the process.
  4. Certificate Issuance: Upon thorough verification of your institution’s paperwork and compliance with NGO regulations, the Commissioner issues the 80G certificate, granting tax exemption status to your organization.

How to Obtain 12A Registration: A Step-by-Step Guide

  1. File Form 10A Application: Begin the process by filing an application in Form 10A, adhering to the specific instructions provided by the jurisdictional Commissioner of Income Tax.
  2. Compliance Verification: Ensure that your application and accompanying documentation comply with the requirements set forth by the Commissioner of Income Tax.
  3. Verification Process: The Commissioner conducts a thorough examination of the application and supporting documents to validate the legitimacy of the organization’s activities.
  4. Additional Documentation: If deemed necessary, the Commissioner may request further paperwork or information to supplement the application.
  5. Issuance of Declaration: Upon satisfactory review and verification, the Commissioner issues a written declaration granting 12A registration, confirming the organization’s eligibility for tax exemption.
  6. Right to Appeal: In the event of application rejection due to dissatisfaction, the applicant is entitled to a fair opportunity to present their case and be heard by the Commissioner.

Documents Required for 80G Registration

  1. Trust Deed (for Trusts): The official deed establishing the trust.
  2. Memorandum of Association (MOA): The foundational document outlining the purpose and regulations of the organization.
  3. Registration Certificate (for Section 8 Companies and Societies): The certificate confirming the entity’s registration status.
  4. No Objection Certificate (NOC): A NOC from the property owner where the institution’s registered office is located.
  5. Form 10G: The official application form for 80G registration.
  6. PAN Document: The PAN card of the NGO.
  7. Utility Bill: A recent utility bill (electricity, water, etc.) or a property tax receipt for the registered office.
  8. Donor Information: A list of donors with their names, addresses, and PAN numbers.
  9. Financial Records: Books of accounts and supporting documents for the last three years, including online income tax returns.
  10. Welfare Initiatives: A detailed list of welfare initiatives undertaken and a progress report for the past three years.

What Are the Documents Required for 12A Registration?

To apply for 12A registration, the following documents are needed:

  1. Certificate of Incorporation (for Section 8 Companies): Along with the Memorandum of Association (MOA) and Articles of Association (AOA) of the company.
  2. Form 10A: The official application form for 12A registration.
  3. Legal ID Proof: Identification documents of the trustees or NGO officials.
  4. Trust Deed: The official deed for the trust.
  5. Registration Certificate: Proof of the entity’s registration status.
  6. Memorandum of Association (MOA): The foundational document outlining the NGO’s purpose and regulations.
  7. Bank Account Statements: The trust’s bank statements for the last three years.
  8. PAN Card: The Permanent Account Number (PAN) card of the firm.