What is an 80G Certificate?

The Income Tax Department issues an 80G Certificate to a non-governmental organization (NGO) such as a charity trust or a Section 8 Corporation. The 80G Certificate is given to encourage donors to provide money to non-profit organizations. Furthermore, when a donor makes a donation to such an organization, they are allowed to deduct that amount from their Gross Total Income, which results in a tax exemption of 50%. In order to qualify for the exemption, the donor must also submit a stamped receipt for the donation. The name of the donor, the date of the donation, and the organization’s PAN must all be included on the receipt.

What is 12A Registration?

Trusts, NGOs, and Section 8 Companies are all eligible for a one-time tax exemption under Section 12 A of the Income Tax Act of 1961. Organizations with a Section 12A registration are free from paying taxes on their surplus income.

Non-governmental organizations (NGOs) are charity and non-profit organizations. They do, however, earn money and must pay tax at regular rates if they are not registered under Section 12A of the Income Tax Act.

Tax benefits to donors : 80G registration allows donors to claim tax deductions on the donations made to the registered non-profit organization. This can incentivize donors to contribute more towards the organization’s charitable activities
Tax exemption on income : 12A registration allows non-profit organizations to claim tax exemption on their income, which can be used for the promotion of their charitable activities. This can help the organization to utilize its resources effectively and achieve its charitable objectives
Increased credibility : Obtaining 80G and 12A registrations can enhance the credibility of the non-profit organization, as it indicates that the organization has met certain standards and compliances laid down by the Income Tax Act
Enhanced donor trust : With 80G and 12A registrations, donors can be assured that their donations will be utilized for genuine charitable activities, as the organization is subject to certain regulations and reporting requirements
Improved visibility : Non-profit organizations with 80G and 12A registrations are listed on the Income Tax Department’s website, which can increase their visibility and credibility among donors and the general public.

Procedure for registering for the 80G :

• Apply for an 80G certificate with the relevant documentation to the Commissioner of Income Tax (Exemption) in the entity’s jurisdictional area.
• After the form and supporting documentation for 80G registration are submitted, the Income Tax Department conducts an on-site examination.
• However, if they appear inappropriate or anything is missing, the Income Tax Officials may request additional documents or evidence.
• The Commissioner issues an 80G certificate to the institution after satisfactory verification of documentation and the NGO’s office.

Procedure for 12A Registration Online in India :

• As per Rule 17A of the Income Tax Act of 1961, you must file an application in Form 10A.
• The application must be completed according to the Jurisdictional Commissioner of Income Tax requirements (Exemptions).
• After receiving the Form and papers, the Commissioner verifies the authenticity of the organization’s activities. He can also request further documents or information if he believes it is essential.
• The Commissioner issues a written order granting 12A Registration based on the satisfactory report. If the Commissioner is not satisfied, the application will be rejected, and the applicant will be given an opportunity to be heard.

Documents Required for the 80G Registration:

• In the case of Section 8 corporations and Societies, a MoA and Registration Certificate are required, as well as a Trust Deed in the case of a Trust.
• Certificate of no objection from the owner of the property where the Institution’s registered office is located.
• Form 10G.
• A copy of the NGO’s tax identification number.
• Copy of utility bills, such as electric, water, or property tax receipts.
• A list of the donors, with their addresses and PAN numbers.
• The records pertain to the last three years’ income tax returns and books of accounts.
• The following is a list of current welfare activities as well as a three-year status report.
• The Board of Trustees is listed in detail.
• RC, MoA, or Trust Deed from the beginning.

Documents Required for the 12A Registration:

• Documentary documentation of the Trust or NGO’s formation (Trust Deed, Registration Certificate, and Memorandum of Association (MOA) of a society).
• Section 8 enterprises must submit a certificate of incorporation as well as copies of their MoA and AoA.
• Form 10A.
• The Trust’s three-year bank account statement.
• The organization’s PAN.