12a/80g for tax exemptions| Registration services 2020
- Under section 12a of the Income Tax Act, various tax rebates are provided to the donors of the registered NGO and trusts. The donor gets financial benefits in a taxable amount of their income. Without 12a/80g registration, an NGO can not provide any kind of tax benefits to the person making a donation.
- If an NGO has registered for section 12a & 80g registration then it is eligible to get tax exempted donations.
- So, it is advisable that all NGOs and trust must register for section 12a & 80g to attract new donors. An NGO can register for the section 12a & 80g registration only after legally registering as an NGO.
Who can apply for the section 12a/80g registration?
- NGOs, Trusts, Charitable trust, Religion, and the section-8 company
- Private entities and family trusts can not apply for the 12a/80g registration.
What are the requirements for 12a/80g registration?
- The NGO must be registered under the Societies Registration Act 1860 and section-8 of society registration.
- The income or assets of the NGO should be exclusively used for charitable purposes
- Proper books of accounts of the NGO should be maintained, including all receipts and expenditures.
- The primary objective of NGOs should be to work for charitable purposes and not profit generation. The main source of income should be from donations only.
The most important advantage of section 12a registration is the income tax exemption provided to the donors of trusts or NGOs. NGO can avail rebates by getting 80g registration.
Section 12A is a one-time registration. There is not any kind of requirement for any renewal of under this registration.
If an NGO has registered for section 12a & 80g registration only then it is eligible for government funding and private donors are also given 50% tax deduction in Income tax on the donations.
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Documents required for 12A/80G registration
- Duly filled in 10A form
- Trust Deed/ MoU
- Registration certificate of the NGO
- The objectives of forming the NGO
- Rules and regulations regarding the working of the society
- The details about the meetings of the NGOs and the frequency with which they are going to be held is to be mentioned
- Information about the Auditors
- Procedure for Arbitration in case of any dispute between the members of the society.
- A list of the names of donors to the registered NGO or Society.
- Another list of the governing board of trustees members with their contact details