By Shiromani Associates – Chartered Accountants
As an NGO or nonprofit organization, one of the best ways to enhance your funding opportunities and provide tax relief to your donors is by obtaining 80G Certification and 12A Registration. At Shiromani Associates, we specialize in assisting NGOs with the seamless registration and compliance process for both 80G and 12A, ensuring your organization receives the financial support and tax exemptions it deserves.
The 80G Certificate is a recognition granted by the Income Tax Department of India to eligible nonprofit organizations, including NGOs, charitable trusts, and Section 8 companies. This certificate allows the organization to receive donations that are eligible for tax deductions under Section 80G of the Income Tax Act.
For donors, contributions made to an NGO or charity with an 80G certificate are tax-deductible, meaning they can reduce their taxable income by the donation amount. The donor must provide the receipt for the donation, which includes details like the donor's name, the donation amount, the institution's PAN, and the date of the donation, to claim this tax benefit.
While an 80G Certificate provides tax exemptions for donations, 12A Registration offers tax exemptions to the NGO or trust itself. It allows NGOs, trusts, and Section 8 companies to avoid paying tax on their income, as long as the income is used for charitable purposes. Without 12A registration, an NGO would be liable to pay tax on its income.
12A registration under the Income Tax Act, 1961 is a one-time process and provides long-term tax exemptions to organizations that engage in charitable activities. NGOs must complete 12A registration to avail these exemptions and maintain their nonprofit status.
The process for obtaining an 80G Certificate involves the following steps:
Step 1: Document Preparation & Request Submission
Gather all essential documents and submit a formal request for an 80G certificate to the Commissioner of Income Tax (Exemption) within your jurisdiction.
Step 2: On-Site Verification by Income Tax Authority
Once your application is submitted, the Income Tax Department will conduct an on-site examination of your NGO to verify the details and ensure compliance with the prescribed regulations.
Step 3: Additional Documentation (if required)
If any of the documents are insufficient or missing, the income tax officials may ask for additional documents or clarifications.
Step 4: Issuance of 80G Certificate
Once all necessary verifications are completed, and your NGO meets the criteria, the Income Tax Commissioner will issue the 80G certificate to your organization.
To complete your 80G registration, you need to provide the following documents:
Trust Deed (for Trusts)
Memorandum of Association (MOA) (for Section 8 companies)
Registration Certificate (for Section 8 companies or societies)
Certificate of No Objection from the property owner where your NGO’s registered office is located
Form 10G: A prescribed application form for 80G registration
PAN Card of the NGO
Proof of Address: A utility bill (electricity/water bill) or real estate tax receipt
List of Donors: Including their names, addresses, and PAN details
Financial Documents:
Books of accounts for the last three years
Income Tax Returns (ITRs) filed for the last three years
Welfare Initiatives Report: A list of ongoing charitable projects with a three-year progress report
Latest Business Documents: Any additional documents related to your NGO’s current operations.
At Shiromani Associates, we offer comprehensive services to guide your NGO through the process of obtaining 80G Certification and 12A Registration. Our services include:
Expert Consultation: Tailored advice on eligibility criteria and the appropriate structure for your NGO.
Document Preparation and Filing: We handle the preparation, filing, and submission of all necessary documentation for both 80G and 12A registration.
Compliance Assistance: We ensure your organization remains compliant with all tax and legal requirements, minimizing any risk of non-compliance.
Ongoing Support: We provide continued support, including advice on the renewal process and other regulatory updates.
With the 80G and 12A certifications, your NGO can attract more donors by offering them tax benefits, while also enjoying tax exemptions on its own income. Let Shiromani Associates help you navigate the complexities of these registrations, ensuring that your organization operates efficiently and within legal frameworks.
Contact us today to begin the 80G and 12A registration process and take the first step toward expanding your NGO’s impact!