80G & 12AA Registration

Section 80G of the Income Tax Act, 1961, allows a deduction from taxable income for donations made to certain specified institutions or funds, subject to a limit of 50% of the donated amount. Section 12A of the Income Tax Act, 1961, provides for a 100% deduction from taxable income for donations made to certain specified funds.

What Is Section 80G Registration Online?

Section 80G provides tax benefits to donors who contribute to your organization. While there is no direct benefit to the NGO itself, this incentivizes people to donate, which will increase your overall donations. This is especially true when donations are sizable or come from organizations.

What Is 12A Registration?

Section 12A registration allows the income tax authorities to recognize an organization (any NGO) as established for charitable purposes. This means they will not tax the income of these institutions, whether from donations or capital gains, as they would for an entity operating for profit.

Benefits of Registering Under 80G & 12A

1. Increased Donations: Registration under section 80G allows your donors to avail tax benefits, which in turn increases your donation receipts. Registration under Section 12A provides tax benefits for the organization.
2. Tax-Efficient Donations: Enables receiving donations from individuals and corporates in a tax-efficient manner.
3. Credibility and Accountability: Builds the credibility and accountability of the trusts/institutions/organizations, recognizing them as charitable organizations.
4. Fundraising for Specific Projects: Helps raise funds for specific projects/activities, benefiting both the donor and the organization.
5. Recognition as a Charitable Organization: Enables receiving grants and being recognized as a charitable organization.
6. Eligibility for Foreign Donations: Allows an organization to avail tax relief for funding from donor agencies and foreign donations.

Documents Required for Section 80G & 12A Registration

• Organization registration certificate
• Audited annual accounts for the past three financial years
• FCRA ID (in case you are going to receive foreign donations)
• NGO Darpan ID (if any)
• PAN card
• Details regarding the activities of the organization

Procedure for Section 80G & 12A Registration Online

Below is the process for 80G and 12A registration:

1. Application: File an application using Form 10A to the Commissioner of Income Tax seeking exemption.
2. Documentation: Accompany the application with all required documents.
3. Review: The Commissioner will review the application and documents, seeking additional information if needed.
4. Approval: If satisfactory, the Commissioner will approve the application, and you will receive a registration certificate. Otherwise, it will be rejected.

Timeline and Validity

The overall process and approval can take around one month. An organization can apply for this as soon as they have their incorporation certificate (e.g., trust deed for a trust, Certificate of Incorporation for Section 8 Companies).

Section 80G and 12A used to be one-time registrations. However, recently the government has stipulated that they are valid for only five years, and organizations must revalidate them after that period.

Revalidation of Section 80G & 12A Registration

Before the end of the five-year validity period, NGOs can revalidate their registration online through the e-filing portal of the IT department. Form 10A will be available under the e-File tab. Once you fill out your form and submit it along with the necessary documents, the revalidation process will begin.