12A Registration is a Tax Exemption Certificate for NGOs.
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
- Copy of Registration Certificate
- Copy of Trust Deed /Bylaws / Memorandum of Association & articles of Association
- Copy of Pan Card of NGO
- Office Proof : Copy of Electricity Bill / Tax Receipt /Water
- NOC from Landlord (where registered office is situated);
- Activities Reports, Photos, News paper Cutting since inception or last 3 years.
- Audit Reports & ITR (if any), since inception or last 3years.
- List of governing body / board of trustees members with their Address, contact details – Attached Format
- Copy of PAN Card of governing body/ board of trustees members
- List of donors along with their address and PAN
Income of an organization is exempted if NGO has 12-A registration. This is one time registration.
If an organization has obtained certification under section 80-G of Income Tax Act then donors of that NGO can claim exemption from Income Tax. Earlier it was not not one time registration and trust were required to get 80G Certificate renewed after validity period. But As per Circular 7/2010 dated 27.10.2010 issued by the CBDT, all Trusts enjoying exemption u/s 80G as on 1.10.2009 and other Trusts obtaining 80G certificate after 1.10.2009 shall continue to hold and enjoy the same for perpetuity unless revoked by the Income Tax Authorities.
Application for registration under section 12A and 80G can be applied just after registration of the NGO.
Yes, Both applications can be applied together or it can be also applied separately. If some organization is willing to apply both applications separately, then application for registration u/s 12A will be applied first. Getting 12A registration must for applying application for registration u/s 80G of Income Tax Act
Approx 6 Months.
There are few conditions on section 80G. 1) The NGO should not have any Income which is not exempted, such as business income. If the NGO has business income then it should maintain separate books of account and should not divert donations received for the purpose of such business. 2) The bylaws or objectives of the NGOs should not contain any provision for spending the income or assets of NGO for the purpose other than charitable. 3) The NGO should not work for the benefit of particular religious community or caste. 4) The NGO should maintain regular accounts of receipt & expenditure. 5) The NGO should properly register under the societies Regulation Act 1860 or under any law corresponding to that Act or should register under section 25 of the Companies Act 1956 or under section 8 of Companies Act 2013
There is a limit on how much money can be exempted from the Income Tax:· If the amount of deduction to a charitable organization or trust is more than 10% of the gross total Income computed under the Act (as reduced by income on which income tax is not payable under any provision of this Act and by any amount in respect of which the assessee is entitled to a deduction under any other provision of this Chapter), then the amount in excess of 10% of Gross Total Income shall not qualify for deduction under section 80G.· The persons or organizations who donate under section 80G gets a deduction of 50% from their taxable Income