12A and 80G Registration: Eligibility & Documents

Non-profit organizations, including trusts, societies, and Section 8 companies, play a vital role in social welfare. However, to maximize their impact and receive tax exemptions and donor benefits, they must obtain 12A and 80G Registration under the Income

Non-profit organizations, including trusts, societies, and Section 8 companies, play a vital role in social welfare. However, to maximize their impact and receive tax exemptions and donor benefits, they must obtain 12A and 80G Registration under the Income Tax Act, 1961.

This article provides a detailed guide on 12A and 80G Registration, including eligibility, benefits, the registration process, required documents, and how it links to NITI Aayog Registration, CSR-1 Registration, and FCRA Registration.

What is 12A and 80G Registration?

12A Registration

12A Registration grants NGOs and non-profits income tax exemption on their earnings. Without this registration, all donations and revenue would be subject to taxation.

80G Registration

80G Registration allows donors to claim tax deductions on their donations, incentivizing contributions to non-profits.

Together, 12A 80G Registration help organizations secure CSR Fund, foreign contributions, and government grants while ensuring legal compliance.

Eligibility Criteria for 12A and 80G Registration

To qualify for 12A 80G Registration, an entity must meet the following criteria:

•Legally registered as a Section 8 company registration, trust, or society

•Must operate for charitable, religious, educational, or social welfare purposes

•Should not be engaged in commercial profit-making activities

•Must have proper financial records and governance structure

Organizations with NITI Aayog Registration and CSR-1 Registration are highly preferred for CSR funding and government grants.

Benefits of 12A and 80G Registration

1. Tax Exemption for NGOs (12A Registration)

•NGOs and Section 8 companies with 12A Registration are exempt from paying income tax on their earnings.

•Help organizations retain more funds for social projects.

2. Increased Donations with 80G Registration

•Donors receive tax benefits, encouraging more contributions.

•CSR Funds can only be provided to organizations with 80G Registration.

3. Access to Government & CSR Funds

•Organizations with 12A 80G Registration qualify for government grants.

•CSR-1 Registration (linked to CSR Applicability) is essential for CSR funding from corporations.

4. Easier FCRA Registration

•NGOs applying for FCRA Registration under the FCRA Act 2010 must have 12A and 80G Registration for financial transparency.

•Help NGOs secure foreign donations through FCRA Online Services.

Documents Required for 12A and 80G Registration

Organizations must provide the following documents:

For 12A Registration:

•PAN Card of the NGO

•Registration Certificate (Trust Deed, Society Registration, or Section 8 Company Incorporation)

•Memorandum of Association (MoA) or Articles of Association (AoA)

•Bank Account Details

•Activity Reports (Last 3 Years, if applicable)

For 80G Registration:

•12A Registration Certificate

•Details of Donors & Financial Statements

•List of Trustees/Directors with ID Proofs

•CSR-1 Registration Certificate (if applicable)

12A and 80G Registration Process Online

Step 1: Apply for NITI Aayog Registration

Before applying for 12A and 80G Registration, NGOs should obtain NITI Aayog Registration through the NGO Darpan Portal.

Step 2: Prepare and Submit Application

Applications for 12A and 80G Registration are filed separately through the Income Tax Department portal using Form 10A (for 12A) and 10G (for 80G).

Step 3: Verification by the Income Tax Department

The IT Department may request additional information or conduct an inspection of the NGO’s premises.

Step 4: Issuance of 12A and 80G Certificates

Upon approval, the NGO receives the 12A and 80G Registration Certificates, which remain valid for 5 years, after which renewal is required.

12A and 80G Registration Fees

The 12A and 80G Registration process is free from government fees. However, NGOs often hire professional consultants for assistance, incurring service charges based on complexity.

Corporate Social Responsibility (CSR) and Its Role in NGO Funding

What is CSR?

CSR Full Form: Corporate Social Responsibility

CSR Definition: The ethical obligation of businesses to contribute to social welfare initiatives.

CSR Applicability for NGOs

•Under CSR Rules, companies must spend 2% of their net profit on social causes.

•NGOs with CSR-1 Registration and 12A and 80G Registration are eligible for CSR Funds.

CSR Activities Funded by Companies

•Education and skill development

•Healthcare and sanitation

•Women empowerment projects

FCRA Registration: Importance for Foreign Funding

What is FCRA Registration?

FCRA Full Form: Foreign Contribution (Regulation) Act

FCRA Registration under the FCRA Act 2010 allows NGOs to receive foreign donations legally.

Steps for FCRA Registration

•Obtain NITI Aayog Registration & 12A and 80G Registration

•Apply through the FCRA Online Portal

•Submit financial and donor details

•Approval from the Ministry of Home Affairs (MHA)

Checking FCRA Renewal Status

NGOs must periodically check their FCRA Renewal Status on FCRA Online Services to maintain compliance.

Conclusion

12A and 80G Registration is essential for NGOs and Section 8 companies seeking tax benefits, government grants, CSR funds, and foreign donations. These registrations not only enhance the organization's credibility but also attract more donations by offering tax exemptions to donors. Additionally, they help NGOs secure CSR and government funding while ensuring compliance with tax and foreign funding regulations. To maximize their impact, NGOs should also obtain NITI Aayog Registration, complete CSR-1 Registration for corporate funding, and maintain FCRA Registration to legally receive foreign contributions, ensuring financial transparency and long-term sustainability.

Frequently Asked Questions (FAQs)

1. What is the main difference between 12A and 80G Registration?

Ans. 12A Registration provides income tax exemption to NGOs and non-profits on their earnings, while 80G Registration allows donors to claim tax deductions on their donations, encouraging more funding.

2. Who is eligible for 12A and 80G Registration?

Ans. Organizations eligible for 12A and 80G Registration include:

•Section 8 Companies

•Trusts and Societies

•Non-profit organizations engaged in charitable, educational, or social welfare activities

3. What documents are required for 12A and 80G Registration?

Ans. The key documents required are:

•NGO PAN Card

•Registration Certificate (Trust Deed, Society Registration, or Section 8 Company Incorporation)

•Financial statements & donor details

•List of directors/trustees with ID proofs

•CSR-1 Registration certificate (if applicable)

4. How much are the 12A and 80G Registration Fees?

Ans. The government does not charge any fees for 12A and 80G Registration. However, NGOs may incur professional consultancy fees if they seek expert assistance.

5. Can an NGO apply for FCRA Registration without 12A and 80G Registration?

Ans. No, NGOs must first obtain 12A and 80G Registration to be eligible for FCRA Registration under the FCRA Act 2010. This ensures financial transparency and compliance with foreign funding regulations.