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80G and 12A Registration
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80G and 12A Registration
It is true that many people donate out of an innate desire to give back to society, the availability of tax deductions can also be a motivating factor for some donors. The ability to claim tax deductions on donations to registered NGOs under Section 12A and 80G of the Income Tax Act can provide additional benefits to both the donor and the NGO. 80G and 12A registrations are two important registrations under the Income Tax Act of India that provide tax benefits to NGOs and charitable organizations.
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Documents Required for 80G and 12A Registration
Registration Certificate and By Laws of the NGO
Copy of PAN Card of the NGO
Copy of Pan Card and Address proof of the members
Income Tax Login Credentials
Digital Signature for digitally signing the application form
Brief Profile of Ngo and Its welfare activities.
What we offer
Benefits of 80G and 12A Registration
Tax exemption
The primary benefit of 12A registration is that it provides tax exemption to registered NGOs. NGOs with 12A registration are exempt from paying income tax on their income generated from charitable activities. This exemption enables NGOs to utilize more of their funds for charitable purposes, rather than paying taxes to the government.
Enhanced credibility
12A registration enhances the credibility and trustworthiness of the NGO in the eyes of donors and the public. It demonstrates that the NGO has undergone scrutiny by the Income Tax Department and has met the necessary criteria to be eligible for tax exemption.
Eligibility for government funding
Many government schemes and programs require NGOs to have 12A registration to be eligible for funding. This registration opens up opportunities for NGOs to apply for government grants and funding, enabling them to expand their activities and reach more beneficiaries.
Compliance with legal requirements
NGOs are required to file their annual income tax returns to maintain 12A registration, which ensures compliance with legal requirements. This compliance helps NGOs avoid any legal repercussions that may arise due to non-compliance with tax laws.
Tax deduction to donors
Donors who contribute to an NGO registered under 80G can claim a deduction of up to 50% of the donated amount from their taxable income. This helps encourage donations to charitable organizations.
Encourages donations
80G registration acts as an incentive for individuals and organizations to donate to registered NGOs. The availability of tax deductions motivates more people to contribute to charitable causes, as it reduces the net cost of their donation.
Greater trust and credibility
An NGO registered under 80G enjoys greater trust and credibility among donors and the public, as it provides assurance that the organization is recognized by the government and operates for genuine charitable purposes.
Increased donor base
An NGO with 80G registration can attract more donors, as they can benefit from tax deductions for their donations. This can help increase the NGO's financial resources and further its charitable activities.
Increased donor confidence
12A registration increases donor confidence in the NGO, as it assures them that their contributions will be utilized for charitable purposes and not for personal gain. This increased confidence can lead to more significant donations and long-term relationships with donors.
Frequently Ask Question
80G registration is a provision under the Income Tax Act that enables donors to claim tax deductions on their donations to eligible NGOs. It is important for NGOs as it encourages individuals and organizations to donate to their cause, increasing their funding and support.
Donors can claim tax deductions on their donations to eligible NGOs with 80G registration. This enables them to reduce their taxable income and lower their tax liability while supporting a charitable cause.
12A registration is a provision under the Income Tax Act that provides tax exemption to registered NGOs. It is important for NGOs as it enables them to utilize more of their funds for charitable purposes, rather than paying taxes to the government.
NGOs that meet certain criteria, such as using their income solely for charitable purposes and maintaining proper books of account, are eligible for 12A registration.
The benefits of 12A registration for NGOs include tax exemption, enhanced credibility, eligibility for government funding, compliance with legal requirements, increased donor confidence, and improved reputation.
One can avail of from 50% to 100% tax deductions from the Income Tax Department without restriction.
80G registration provides tax benefits to donors by allowing them to claim deductions on their donations to NGOs, while 12A registration provides tax exemption to NGOs themselves, exempting them from paying income tax on their charitable income.
No, not all NGOs are eligible. NGOs must meet specific criteria such as having a non-profit motive and engaging in charitable activities. The legal entity of the NGO, such as a trust, society, or Section 8 company, also plays a role in eligibility.
Yes, NGOs registered under 80G and 12A can receive foreign donations. However, it is important to comply with the Foreign Contribution (Regulation) Act (FCRA) and other applicable regulations for receiving foreign funds.