12A and 80G Registration
12A and 80G Registration under the Income Tax Act, 1961, that are relevant to non-profit organizations in India.
Section 12A Registration: This registration exempts the income of a charitable organization from income tax. It is a one-time registration that is valid for five years, after which it needs to be re-validated.
Section 80G Registration: This registration allows donors to claim a tax deduction on their donations made to the organization. The percentage of deduction varies depending on the type of donation. 80G registration is valid for five years and needs to be re-validated as well.
Free Consultation by Expert
Here’s a table summarizing the key differences between 12A and 80G Registration:
Feature | 12A Registration | 80G Registration | |
|---|---|---|---|
Benefit | Exemption on income tax for the organisation | Tax deduction for donors | |
Validity | 5 years (need re-validation) | 5 years (needs re-validation) | |
Applicability | Charitable OrganiZations | Donors to charitable organizations | |
Who should get these registrations?
12A Registration: Any non-profit organization that wants to avail tax exemption on its income should get 12A registration. This includes NGOs, trusts, and Section 8 companies.
80G Registration: While not mandatory, it is beneficial for organizations to get 80G registration to attract more donors. Donors are more likely to donate to an organization if they know they can claim a tax deduction on their donation.
Under which act the registration of 12A & 80G formed ?
The 12A and 80G registration in India is formed under the Income Tax Act, 1961.
What are the benefits we get from 12A and 80G Registration ?
Obtaining 12A and 80G registration in India offers several benefits to charitable organizations and donors with Black Tie Legal Service India LLP we help you getting this benefit.
Benefits of 12A Registration:
- Tax Exemption: This is the primary benefit. By registering under 12A, the NGO won’t have to pay income tax on any income it earns from grants, donations or other qualifying activities. This frees up more funds to be used directly for their charitable work.
- Eligibility for Government Funding: Having 12A registration can make the NGO eligible for certain government grants and programs which can further support their social initiatives.
- No Renewal Required: Unlike 80G registration, 12A registration has a one-time validation process and doesn’t need renewal after five years.
80G Registration:
- Increased Donor Pool: By having 80G registration, donors can claim a tax deduction on their donations made to the NGO. This makes donating more attractive and can significantly increase the NGO’s fundraising potential.
- Enhanced Credibility: 80G registration acts as a kind of certification from the government, indicating that the NGO meets certain criteria and operates transparently. This can give donors more confidence when deciding to donate.
In short, 12A and 80G registrations work together to improve an NGO’s financial health and credibility, which ultimately allows them to better serve their beneficiaries.
Who is eligible for 12A & 80G Registration ?
Organizations eligible for 12A and 80G registration in India typically include:
12A Registration:
Eligible Entities:
- – Charitable trusts
– Societies registered under the Societies Registration Act, 1860
– Section 8 companies under the Companies Act, 2013
– Universities and other educational institutions
– Hospitals and other medical institutions
– Religious institutions
– Non-profit research institutions
- – Charitable trusts
Key Eligibility Criteria:
- – The organization must be established wholly for charitable purposes and not for any profit motive.
– The organization must be registered under the relevant law (e.g., Trust Act, Societies Registration Act, Companies Act).
– The organization must maintain proper books of accounts.
– The income and assets of the organization must be used exclusively for charitable purposes and not for the benefit of any specific individual or group.
- – The organization must be established wholly for charitable purposes and not for any profit motive.
80G Registration:
Eligibility:
Any entity eligible for 12A registration can also apply for 80G registration. This means the same type of organizations listed above for 12A are eligible for 80G as well.
Important Exceptions:
Certain specific categories are not eligible for 80G registration, even if they have 12A registration. These exceptions include:
- – Political parties
– Religious institutions for religious purposes (donations for these purposes are not eligible for tax deduction)
– Professional or trade associations
- – Political parties
In simpler terms:
- – If your organization is a non-profit working for charitable purposes and registered under the relevant law, you are likely eligible for both 12A and 80G registration.
- – 80G registration provides a benefit for donors, while 12A benefits the organization itself.
Recommendations:
- – If your organization is eligible, getting both 12A and 80G registration is recommended.
- – You can consult us (Black Tie Legal Services India LLP) as tax advisor to determine if your specific organization meets the eligibility criteria and to navigate the application process.
What are the required documents for 12A & 80G Registration ?
The required documents for 12A and 80G registration in India typically include:
For 12A Registration:
- Memorandum of Association and Articles of Association.
- Registration certificate of the organization.
- PAN card of the organization.
- Audited financial statements.
- Details of activities carried out by the organization.
- Copy of the trust deed (if applicable).
- Any other documents as specified by the tax authorities.
For 80G Registration:
- 12A registration certificate.
- Audited financial statements.
- Project reports detailing charitable activities.
- PAN card of the organization.
- Copy of the trust deed or registration certificate.
- Any other documents as required by the Commissioner of Income Tax.
What Black Tie Legal Services India LLP can offer?
Black Tie Legal Service India LLP can offer a variety of services to assist with 80G and 12A registration in India. Here’s a breakdown of some key services they can provide:
Pre-Registration Services:
- Eligibility Assessment: Black Tie Legal Service India LLP can help determine if your organization meets the eligibility criteria for 12A and 80G registration based on its nature, purpose, and legal structure.
- Document Management: Black Tie Legal Service India LLP can assist in gathering, organizing, and preparing all the necessary documents required for the application process.
- Application Drafting: Black Tie Legal Service India LLP can help draft and complete Form 10A (the unified form) accurately and efficiently, ensuring all relevant information is captured.
Registration Process Support:
- Online Application Assistance: We can guide you through the online application process on the Income Tax Department’s e-filing portal, ensuring proper submission and document attachment.
- Communication with Authorities: Black Tie act as a liaison between your organization and the Income Tax Department, handling any queries or clarifications requested during processing.
Post-Registration Services:
- Status Tracking: Black Tie Legal Service India LLP can track the status of your application and keep you informed of any updates from the department.
- Response Management: Black Tie assist in drafting responses to any questions or requests for additional information from the Income Tax Department.
- Renewal Reminders (if applicable): For 80G registration, Black Tie help set reminders for renewal after the validity period.
Additional Services:
- Compliance Guidance: Black Tie Legal Service India LLP can provide ongoing guidance on maintaining compliance with the terms and conditions of 12A and 80G registration.
- Accounting and Record-keeping Support: Black Tie Legal Service India LLP offer assistance with maintaining proper books of accounts as required for registration purposes.
Important Note:
- It’s important to choose a company like Black Tie Legal Service India LLP with qualified professionals who have expertise in income tax matters and the registration process.
- Look for experts like Black Tie with a good reputation and positive client reviews.