What is 80G and 12 A?


An NGO (society or trust) can avail income tax exemption by getting itself registered and complying with certain other formalities, but such registration does not provide any benefit to the persons making donations. The Income Tax Act 1961 has certain provisions which offer tax benefits to the “donors”. All NGOs should avail the advantage of these provisions to attract potential donors. Section 80G is one of such sections. 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. If an ngo gets registered under 12AA and 80g, then only it is applicable for any government funding. A newly registered ngo can also apply for 80g registration. The following documents are required for 80g registration.

Section 12a and 80g is of a great relief. NGOs do not have to pay tax for the entire lifetime if it gets registered under section 12aa. Besides, the corporate and the ministries prefer to give donations to those who are having 12aa and 80g registration. By doing such, their taxes are deducted by 50% of the donation given. Today in this growing IT world, the website of a NGO is essential which speaks about the NGO profile, activates, their members, its history, address and the social work done by it. They should maintain their balance sheets, annual reports, accounts, records, bills, vouchers, photographs for proof of their social activities. This is of a real great help especially during the investigation by the IB officers during FCRA Registration or verification by the government officials applicable for government funding or any corporate officials applicable for corporate social responsibility funding.


Condition for registration u/s 80g :


For approval under section 80G the following conditions are to be met:
i) the NGO must not have any income which are not exempted, such as company income If: the NGO has business income, then it ought to preserve separate books of accounts and need not divert donations gotten for the purpose of such business.
ii) the bye laws or goals of the NGOs must not contain any regulation for investing the income or possessions of the NGO for purposes aside from charitable activities.
iii) the NGO is not working for the advantage of particular religious community or caste.
iv) the NGO maintains routine accounts of its expenditures & receipts.
v) the NGO is appropriately signed up under the Societies Registration Act 1860 or under any law corresponding to that act or is signed up under section 8 of the Companies Act 2013.


Rietway Consultants 80 G and 12 A Package


The Services Includes:
✅ Filing of 80 G
✅ Filing of 12 A
✅Reply to Notice of 80 G
✅Reply to Notice of 12 A


Documents Required are as Follows:


1. A certified copy of the registration certificate when the trust was established.
2. A certified copy of the document (Trust deed/MOA and AOA) which is evidence that this institution/trust exists and is registered.
3. List of name, address and Pan details of the trustees/managers.
4. Copy of Pan Card of NGO.
5. Copy of Pan card of all Members.
6. Address Proof for the NGO, copy of Electricity Bill/Receipt of Tax on House Property/Water Bill.
7. Proof of the welfare activities carried out & Progress Report since incorporation or else, last 3 years.
8. The Statement of Accounts, Balance Sheet, Income Tax Return documents since incorporation or else, last 3 years.
9. List and details of donors, such as their address and PAN.


Conditions for registration under 12 A


Charitable Trust, Religious Trust, Society, and Section 8 Company, that has been formed to provide benefits to the public.
Private or family Trusts are not eligible.


Benefits of 80G Registration under the Income Tax Act


The direct advantages of registration of NGO with 80G would occur to the donor. He is entitled to claim a tax deduction, by using the receipt of the donation he gets from you.
In other words, he can use 80G registration of your NGO to reduce the amount he has donated to your organization from his total taxable income.
The threefold benefits of this registration would be:
1. As a society bylaw, 80G registration makes your NGO a promising prospect, enhancing its goodwill and the confidence of those associated with your brand.
2. It enables the donor to reap the tax advantage of lowering taxable income associated with it, as well as, glad about contributing to a good cause.
3. Only an NGO with both 12A and 80G registration is eligible for government funding.
4. Getting an 80G registration also facilitates seeking foreign contributions.


Benefits of Registration u/s 12AA :


1) The income applied for charitable or religious purpose will be considered as application of income i.e. expenditure incurred for charitable or religious purpose will be allowed while computing income of the trust.
2) The benefit of accumulating or setting aside of income not exceeding 15% for charitable or religious purpose will be available.
3) The accumulation of income, which is deemed as application of income as per section 11(2), shall not be included in the total income.
4) NGO’s receives various grants from government and other agencies. They are eligible to get grants and financial funding from various agencies. These agencies generally make grants to 12A registered NGO’s.
5) Benefit in Section 80G registration. NGO’s have to apply separately for Section 80G registration.
It is important to note that when registration is granted under section 12A, it does not mean that section 80G approval is to be given i.e. registration under section 12A will not provide automatic approval under section 80G. Section 80G applies only to charitable trusts or institution. It does not apply to religious trust or institutions.
6) Benefit in FCRA registration. NGO’s seeking foreign contributions have to obtain FCRA registration from the Ministry of Home Affairs.
7) Finance Act’2014 has extended the benefits of registration for prior years as well. These benefits have been extended to the trusts or institutions where the registration has been granted under section 12AA.
The benefit of Section 11 and 12 will apply to trust or institutions for all the pending assessments on the date of such registration subject to condition that the objects and activities of Trust in the earlier years claimed are same on the basis of which the registration has been granted.

Further, it is provided that no action under section 147 shall be taken by the Assessing Officer in case of such trust or institution for any assessment year preceding the aforesaid assessment year only for non-registration of such trust or institution for the said assessment year.
The above benefits would not be available in case of any trust or institution which anytime had applied for registration and the same was refused under section 12AA or a registration once granted was cancelled.
8) Registration under section 12A is one-time registration. Once the registration is granted to the trust, it will be hold good till the cancellation of registration. There is no provision which requires any renewal of registration. Thus, the benefits of registration can be claimed for lifetime by NGO.

Disqualification from exemption:


At times, under certain circumstances even after the registration process and meeting all the legal requirements, donors may be disentitled from claiming tax deductions.
The following situations are:
1. If an organization is engaged in religious affairs or promotes the interest of a particular community
2. If the organization does not hold transparency in its routine account of expenditures and receipts
3. If the NGO is not legally registered under the particular Act it falls onto - Societies, Section 8 and Trust
4. If this registration process for NGO has any ‘non exempted income’, that is if they have any business income or a commercial purpose that gives rise to incomes not specifically exempted for NGOs.