12A Registration is one time Exemption obtained by NGOs. Income of NGO is exempt from Income Tax if NGO has 12A Registration.
Income Tax Exemption is available to all Non Profit NGOs. However, this is not automatic. The NGO has to apply to Income Tax Office to get this Exemption. Hence it is important for all NGOs (Trust, Society, Non Profit Company) to apply for 12A registration in order to get Tax Exemption. NGO can apply for 12A Registration right after date of Incorporation.
This Exemption is available for all non-profit NGOs. Unfortunately many NGOs have not applied for this even after 10-15 years of working. This delay can be forgiven if NGO apply with sufficient reasons.
When NGO (trust, society or nonprofit company) get registered with Income Tax department under Income Tax Act 1961, to claim tax exemption for their income, it called the 12A registration.
While processing such application, the concerned authority normally concentrates on the genuineness of the NGO. Once the genuineness of the activities & creation is established, then it is incumbent upon the authority to pass an order in writing, registering the NGO.
Who Can Apply:
- All Registered NGOs (Society, Trust, Non Profit Company)
Important Details About Registration
12A Registration is one Time Registration, The Income tax officers have the rights to grant or to refuse registration to your application. Also, note that, 12A registration of an NGO shall be cancelled by the Income tax department, if it feels that NGO is not fit as per law at any point of time.
- Income of NGO is exempted from Income Tax, if NGO has 12A Registration.
- Priority to Receive Donation from Government, Individual & corporate.
- Without 12A Registration NGO can’t apply for 80G Registration & face problems to receive funds / donations from public