80G and 12A registrations apply only to NGOs and Charitable Organizations if they fulfil the following conditions: They must not have any income generated from a business They should either be a charitable trust or a registered society Also, such organizations should not be using their assets or income for any other purpose other than making charity Furthermore, they must maintain a regular book of accounts in favor of their receipts and expenses. The trustees or any other body governing the organization should not be involved in deriving any undue benefits from these funds They should not be working for the benefit of any particular caste or religion Also, in the case of business-related income, the organization should maintain a separate book of accounts. However, the donations received by the NGO must not be used for such businesses.
Overview of 80G and 12A Registrations
An 80G Certificate is issued by the Income Tax Department to a non-governmental organization (NGO) such as a charitable trust, or a Section 8 Company. The 80G Certificate is granted to encourage the donors to donate funds into such non- profit organizations. Furthermore, the donor gets a tax exemption of 50% when they make donations to such organization, as they become eligible to deduct such amount from their Gross Total Income. Additionally, in order to avail the exemption, the donor needs to attach the stamped receipt of the donation made. Such a receipt must contain the donor’s name, date of donation, and PAN of the organization.
About 12A Registration
Now that we have covered the 80G Registration, we will know about Section 12A and how to get registered under Section 12A of the Income Tax Act, 1961. Section 12 A of the Income Tax Act, 1961, is a onetime tax exemption provided to trusts, NGOs and Section 8 Companies. Organizations holding a registration under section 12A are exempted from paying taxes on their surplus income. NGOs are organizations involved in charitable and non-profit activities. However, they do earn income and they are required to pay tax as per normal rates if not registered under section 12A, Income Tax Act.
The following documents are required for 80G registration is as follows:
* MoA and Registration certificate in case of Section 8 companies and Societies and a Trust Deed in case of a Trust.
* No objection certificate from the owner of the property where the registered office of the Institution is situated.
* Form 10G.
* A copy of the PAN of the NGO.
* Copy of Utility Bills such as Electricity bill, water bill or House Tax Receipt.
* A list of the donors along with their address and PAN.
* The documents related to Income Tax Returns and the Book of Accounts of the past three years.
* The list of the welfare activities being carried out & the progress report of the last three years.
* A detailed list of the Board of Trustees.
* Original RC, MoA, or Trust Deed..
