NGO (Non-Governmental Organization) is established solely to serve non-profit humanitarian purposes in the form of Charitable Trust/Society/Section 8 Company, and once such entity is formally registered, it is approved of a slew of tax exemptions, benefits, reliefs, and the provision of tax deductions for donors. For that, 12A and 80G registrations are required; otherwise, ANY income earned by an NGO, such as service/production/donation, will be treated as normal taxable income without regard for the purpose of such income.
NGOs with 12A and 80G Certificates gets an upgraded commercial value than its counterparts without such certificates:
- Provision of Government Funding allowed ONLY to such NGOs
- A 12A registered NGO is permitted of utilising tax exempted income for its lifetime
- Being permitted of providing valid donation receipts (printed with 80G registration ID) allowed for tax exemptions, NGOs with 80G Certificate receives more donors
- 12A registration is compulsory part in getting 80G registration
- 12A and 80G registrations can be taken together or separately.
- Private/Family Trust NOT eligible for 12A Certificate
Eligibility for 12A and 80G Registrations
- NGOs working as Public Charitable Trust or u/s 25 of the Companies Act, 1956 working ONLY for the public welfare are allowed for this provision.
- Donation as permitted u/s 80G is allowed for tax exemption
- NGO assets should ONLY be used for charitable purposes.
- NGOs should correctly maintain Books of Account of its expenditures and receipts.
Benefits of 12A And 80G Registration
- Through tax exemption on NGO income, more capital is available for charitable activities.
- Funds and grants from recognized agencies, governments, and international organizations are permitted.
- ONLY 12A and 80G registered NGOs may accept international funding, with exemptions available under the Foreign Regulation Act of 2010.
- Attracts more donors, broadening the scope of the NGO's objectives.
- When an NGO registers and obtains 12A and 80G registration, it gains more operational exposure and status value.
- Both 12A and 80G are one-time registrations that are valid for the life of the NGO.
Documents Required for the 80G Registration
- MoA and Registration certificate in case of Section 8 companies and Societies and a Trust Deed in case of a Trust
- No objection certificate from the owner of the property where the registered office of the Institution is situated
- Form 10G
- A copy of the PAN of the NGO
- Copy of Utility Bills such as Electricity bill, water bill or House Tax Receipt
- A list of the donors along with their address and PAN
- The documents related to Income Tax Returns and the Book of Accounts of the past three years
- The list of the welfare activities being carried out & the progress report of the last three years
- A detailed list of the Board of Trustees
- Original RC, MoA, or Trust Deed.