12AA & 80G Registration in India
What is 12AA Registration?
12AA registration is the approval of charitable or religious trusts/organizations under Section 12A of the Income Tax Act, 1961. It is mandatory for any NGO, society, or trust to claim income tax exemption for its charitable activities. Without 12A registration, the income of the trust or NGO is fully taxable under the Income Tax Act.
Legal Provision:
- Income Tax Act, 1961 – Section 12A
- Provides exemption from income tax for income derived from charitable or religious purposes, subject to compliance.
- Includes conditions for maintenance of books, proper application of funds, and reporting.
Purpose:
- To enable non-profit organizations to function tax-free.
- To ensure transparency and compliance in financial and operational activities.
- Required for further approvals such as 80G registration, FCRA, CSR funding, or government grants.
What is 80G Registration?
80G registration is the approval granted to charitable organizations allowing donors to claim deduction of donations under Section 80G of the Income Tax Act, 1961.
Legal Provision:
- Income Tax Act, 1961 – Section 80G
- Donations made to eligible NGOs or charitable trusts are eligible for 100% or 50% tax deduction depending on the category of organization and donation.
- Encourages public donations to charitable causes.
Purpose:
- Promotes donor participation by offering tax benefits.
- Enhances credibility of NGOs/trusts with tax-exempt donation receipts.
- Facilitates access to funding from corporates and individuals.
Who Can Apply?
- Trusts registered under the Indian Trust Act, 1882.
- Societies registered under the Societies Registration Act, 1860.
- Section 8 Companies under Companies Act, 2013.
- Must be engaged in charitable, religious, educational, medical, or social welfare activities.
Note: 12A registration is pre-requisite for applying for 80G registration.
Documents Required
For 12AA Registration:
- Trust Deed / Society Registration Certificate / Section 8 Company Certificate
- PAN of the Trust/Organization
- Audited financial statements of last 3 years (if applicable)
- Details of activities, purpose, and objects
- Address proof of registered office
- Identity and address proofs of trustees/board members
For 80G Registration:
- 12A Registration Certificate
- Trust Deed / Society/Section 8 Company documents
- PAN of the organization
- Audited financial statements (last 3 years)
- Activities undertaken and funds utilized
- Board resolution authorizing application for 80G approval
- Details of bank accounts and donation receipts format
Procedure for 12AA Registration
- Prepare Documents: Trust Deed, PAN, financial statements, and details of activities.
- Apply Online: Submit application via Income Tax e-Filing portal under Form 10A.
- Verification: IT authorities may conduct verification or request additional documents.
- Issuance of Certificate: Upon satisfaction, 12AA registration certificate is issued.
- Compliance: Maintain proper books, file IT Returns annually, and ensure funds are applied for charitable purposes only.
Procedure for 80G Registration
- Ensure 12AA Approval: Organization must have active 12A registration.
- Prepare Documents: Audited accounts, activity reports, donation receipts, and board resolution.
- Apply Online: Submit Form 10G through the Income Tax e-Filing portal.
- Scrutiny & Verification: IT authorities verify the authenticity of charitable activities and financial statements.
- Issuance of 80G Certificate: Approval granted specifying eligibility of 50% or 100% tax-deductible donations.
Advantages of 12AA & 80G Registration
- Income Tax Exemption: 12A ensures the organization’s income from charitable activities is exempt from tax.
- Tax-Deductible Donations: 80G enables donors to claim deductions, encouraging more contributions.
- Credibility: Enhances transparency and public trust in the NGO/charity.
- Eligibility for Grants: Essential for applying for government and corporate CSR funds.
- Compliance & Transparency: Mandatory reporting ensures legal and financial accountability.
- Ease in Fundraising: Corporate and individual donors prefer NGOs with 12A and 80G approvals.
Our Services at India Stat Filing
- Guidance on eligibility, documentation, and application for 12AA & 80G registrations.
- Preparation of required forms (Form 10A and Form 10G) with correct disclosures.
- Assistance with Income Tax verification, scrutiny responses, and follow-up.
- End-to-end support for trusts, societies, and Section 8 companies.
- Advisory for maintaining books, donation receipts, and compliance post-registration.
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Ensure your charitable organization is legally compliant, tax-exempt, and able to attract donations with 12AA and 80G registration from India Stat Filing.