12A & 80G Registrations For Ngo’s In India

12A and 80G registrations are crucial for NGOs (Non-Governmental Organizations) in India, as they provide tax exemptions and encourage donations. Here’s a breakdown of what these registrations mean and how they benefit NGOs:

1. 12A Registration

• Purpose: Grants tax exemption to the NGO on its income.
• Benefits:
  • The NGO’s income (from donations, grants, or other sources) is exempt from income tax.
  • Applicable for the entire lifetime of the NGO, provided it continues to meet the requirements.
• Eligibility:
  • The NGO must be registered as a Trust, Society, or Section 8 Company.
  • It must operate for charitable purposes (e.g., education, health, poverty alleviation, etc.).
• Validity: Once granted, it is valid indefinitely (as per the Finance Act, 2020).

2. 80G Registration

• Purpose: Provides tax benefits to donors who contribute to the NGO.
• Benefits:
  • Donors can claim a deduction of their donation under Section 80G of the Income Tax Act.
  • Encourages more people to donate to the NGO.
• Eligibility:
  • The NGO must already have 12A registration.
  • It must operate for charitable purposes and maintain proper accounts.
• Validity: Typically valid for 3-5 years, after which it must be renewed.

Steps to Obtain 12A and 80G Registration

1. Register the NGO: As a Trust, Society, or Section 8 Company.
2. Apply for 12A:
   • Submit Form 10A to the Income Tax Department.
   • Provide necessary documents (e.g., registration certificate, PAN, MOA, AOA, etc.).
3. Apply for 80G:
   • Submit Form 10G after obtaining 12A registration.
   • Provide audited financial statements, activity reports, and other required documents.
4. Verification: The Income Tax Department will verify the application and grant approval.

Key Documents Required

• NGO registration certificate.
• PAN card of the NGO.
• Trust Deed, MOA, or AOA (as applicable).
• Audited financial statements.
• Activity report and future plans. Details of donors and donations (if applicable).
• Importance for NGOs
  • 12A: Ensures the NGO’s income is tax-free, allowing more funds to be utilized for charitable activities.
  • 80G: Attracts more donors by offering them tax benefits, increasing the NGO’s funding potential.

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