12A and 80G Registration: Are you an individual or an organization contemplating the idea of lending a helping hand to society? Starting a non-profit organization can be a wonderful opportunity to do your part in upliftment & make an impactful contribution to society. However, to run a non-profit organization, you need to comply with certain legal formalities, including obtaining essential registrations.
Non-profit organizations that want to receive tax benefits require proper registration under Section 12A and 80G of the Income Tax Act, 1961. Section 12A registers them under the tax-exempt status, while Section 80G provides income tax deductions to the donors. These registrations help the organizations to obtain government support, tax relief, and enable them to effectively carry out their social welfare activities. These registrations build credibility for non-profits, create transparency in financial reporting, and promote donation culture.
Benefits of 12A Registration:
12A Registration offers tax exemptions for non-profit organizations & donors.
Increased credibility and trust among donors due to strict regulations.
Eligibility for government funding programs, grants, and partnerships.
Strengthened accountability and transparency through mandatory audits and reporting.
Ability to expand operations and impact due to increased financial stability.
Eligibility for 12A and 80G Registration:
It must be a religious trust or a charitable institution.
Your organization must render charitable services.
Your organization's accounts must be audited annually.
The organization should not have any income arising from any business or profession or should not have any profit set aside for investment or for any other purposes.
Process of 12A and 80G Registration
The process of registering for 12A and 80G is an important step for organizations looking to avail tax benefits for their charitable activities. It can, however, be a complex and lengthy process, and requires a thorough understanding of the regulations and guidelines involved. Follow us and get yourself registered successfully.
Steps for 12A Registration Process
Step 1. Before commencing registration for 12A, ensure that you have compiled all the necessary documents required by the authorities (discussed below).
Step 2. Prepare and file the Form 10A application with relevant documents such as trust deed, memorandum of association, and audited accounts.
Step 3. Submit your application form to the Income Tax Commissioner along with the necessary fees.
Step 4. As all the documents are verified & reviewed, a certificate of registration under section 12A will be issued to the organization.
Steps for 80G Registration Process
Step 1. Once you receive your 12A registration certificate, prepare Form 10G, which is a declaration for 80G registration. Fill in the required details & attach the necessary documents.
Step 2. Submit the completed Form 10G with the necessary documents to the Income Tax Department.
Step 3. It can take anywhere around 1 month for the Income Tax Department to approve your application for 80G registration. Be patient & follow up with the concerned authorities to know the status of your application.
Step 4. Once your application is approved, you will receive your 80G certificate. This certificate needs to be renewed every few years to maintain the status of a charitable organization
