80G Registration

NGOs obtain an 80G registration to allow their donors to deduct their contributions from their taxes. The goal of 80G registration is to promote increasing donations to NGOs to fund their humanitarian endeavours. This optional registration is available only after completing the 12A registration process.

It allows individuals or entities who donate to a 80G-registered NGO to claim a deduction on their income tax. This deduction is a percentage of the amount donated and can significantly reduce the donor’s taxable income. The purpose of this provision is to encourage more donations by providing financial benefits to donors.

80G registration allows donors to avail tax deductions on their donations So, it is useful to register and obtain the  80G certificate to order to raise more funds / donations to perform social activities.

Who can apply for 80G registration?

The following types of organisations are eligible to apply for  80G registration,

• Charitable Trusts: Organizations established for charitable purposes.
• Registered Societies: Societies that are formally registered under the Societies Registration Act or similar state laws.
• Section 8 Companies: Companies formed under Section 8 of the Companies Act 2013 specifically for promoting charitable activities.
• Religious Organizations: Groups that primarily focus on religious activities and charitable work.
• Educational Institutions: Non-profit schools, colleges, and educational foundations.
• Medical Institutions: Non-profit hospitals and medical research organisations

80G Registration Eligibility Criteria

This allows donors to claim tax deductions on donations made to eligible non-profit organizations. Eligibility for Section 80G registration includes:

• Nature of Organisation: Must be a non-profit operating as a registered trust, society, or Section 8 company focused on charitable or religious purposes, serving the public interest.
• 12A Registration Requirement: Organizations must already be exempt under Sections 11 and 12, evidenced by a 12A registration.
• Restrictions on Usage of Income: The governing documents must strictly limit the use of funds to charitable purposes only.
• Inclusivity of Beneficiaries: The benefits of the organization should not be restricted to any particular religious community or caste, ensuring a wider societal benefit.
• Regular Accounting: Accurate and regular financial records must be kept to provide transparency and accountability.

Additional Notes:

• Religious Trusts: 12A registration is suitable only for public religious trusts, not for those serving private religious functions.
• Scope of Public Utility Activities: These should not involve commercial activities unless they support the organization’s charitable purpose, with such income not exceeding 20% of total receipts in the previous year.

Benefit of 80G Registration

• Increased Funding With 80G Registration, donors can claim tax deductions for their contributions to your NGO. This can lead to increased funding, as more people are incentivized to support your cause.
• Enhanced Credibility Having Service 12A and 80G registrations demonstrates to the public and potential donors that your NGO is a credible and legitimate organization.
• Improved Record Keeping The registration process requires that your NGO maintain proper financial records, which can improve the overall transparency and accountability of your organization.