Charitable institutions needs to register under section 12A and 80G to avail tax exemptions and benefits which are governed by Sections 12A/12AA and 80G of the Income Tax Act, 1961.Once registered under Section 12A/80G, an NGO becomes eligible for tax exemption on its income, i.e. it doesn’t have to pay tax on surplus funds generated through grants, donations, or other revenue as long as these funds are used for charitable purposes.
| CATEGORY | DOCUMENTS REQUIRED |
|---|---|
| TRUST | • PAN Card of Trust • Trust deed • Audited Financial Statement of last 3 years • Registration certificate • PAN Card and Adhar Card of authorized representative with designation • Activities of Trust |
| SOCIETY | •Same documents as of Trust •PAN Card of Society •Registration certificate |
| SECTION 8 COMPANY | •Same documents as of Trust •PAN Card of Company •Certificate of incorporation |
BENEFITS OF 12A AND 80 REGISTRATIONS
The benefits of obtaining 80G and 12A registrations for charitable organizations are:
1. Tax Exemptions for Donors
2. Enhanced Credibility and Trust
3. Increased Fundraising Potential
4. Access to Government Grants
5. Long-Term Sustainability
6. Efficient Utilization of Resources
ANNUAL RETURN
Under 12A and 80G registrations, charitable institutions need to file:
Income & Expenditure Account, Receipt and payment account and Balance Sheet along with the Annual Return (Form 10B) for the Audit Report
Due date: Before September 30th of the following year
CLOSURE PROCEDURE
12A and 80G Registration can be cancelled voluntary by following below steps:
1. Logn in to Income tax portalwith your credentials
2. Submit an application to the Income Tax Department requesting cancellation of the 12A and 80Gregistration with reasons
3. After receiving the application, the IT Department will review the request and verify that all the criteria are met for cancellation.
4. On satisfaction, the IT Department will issue a formal cancellation order for the 12A/80G registration.
5. The organization will no longer be eligible for tax exemption under 12A/80G after the cancellation