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SECTION 12A & 80G
REGISTRATION OF INCOME TAX
What is Section 12A Registration?
12A registration is granted by the Income Tax Exemption Department to Section 8 Companies, Trusts and other not for profit organisations. The purpose of the registration is to be exempt NGO’s from the payment of income tax. 12A registration is generally applied for immediately after incorporation.
NGOs which have obtained 12A registration enjoy exemption from paying income tax on their surplus income. The 12A registration facility is available for all non-profit entities.
What is Section 80G Registrations?
Section 80G is a registration provide benefit to the persons making donations. If an NGO gets itself registered under section 80G then the person or the organisation making a donation to the NGO will get a deduction of 50% from his/its taxable income.
Hence, it is necessary for all Trusts, NGOs and other Not-for-Profit organisations to register for Section 12A & Section 80 G of the Income Tax Act.
In Union Budget 2020, Finance Ministry had proposed major amendments for granting exemptions under Section 12A & Section 80 G.
The Key features of New Section 12A & Section 80G Registration are
Registration process is made completely electronic under which a 16 digit Unique Registration Number (URN) shall be issued to all new and existing charity institutions.
Applicable Form for registration are:
New charity institution which is yet to start their charitable activities, to allow them provisional 12 A & 80 G registration for three years.
Conversion of provisional registration into regular registration: Before 6 Months of Expiry or 6 Months from commencement of activities whichever is earlier.
Regular 12 A & 80 G registration are valid for 5 years, renewal of registration has to be done after every five years.
For Provisional Registration to new entities &
Re-Validation of 12A & 80G Registration of existing entities.
Conversion of provisional registration into regular registration.
Renewal of registration/approval after five years.
Re-registration for modification of objects for entities registered under Section 12A & 80G.
DOCUMENTS FOR 12A & 80G REGISTRATION
Self-certified copy of Trust Registration Certificate or Incorporation Certificate & Section 8
License Certificate for Section 8 Company.
Self-Certified copy of Trust deed, Bye laws, MOA & AOA, whichever is applicable.
Previous 3 Financial Years Financial Statement / Audit Report.
PAN, Aadhar Card Mobile No & Email id of all trusties / Directors.
DARPAN Registration Number & FCRA Registration Certificate if available.
Any previous rejected 12A or 80G application details.