NGOs mainly operate on donations. NGOs must register under Section 80G and Section 12A of the Income tax Act to claim those Tax exemptions (available to both donors and receivers). It's a time consuming process and at times tough for non-professionals to finish.

Furthermore, changes recently made it mandatory for all NGOs registered under these 2 sections to re-register under sections 80G and 12A to keep those tax benefits. Furthermore, an NGO seeking CSR funding must register using Form CSR-1.

What is 12A and 80G Registration?

Non-Profit Organisations are essential for economic and social progress of India. But they have no stable income from which to produce revenues on their own. They rely almost entirely on grants, donations and other unconditional contributions.

These contributions enable them to continue their operations and meet their goals promptly. 12A and 80G Registrations are ways the Government seeks to encourage such contributions to non-profit organisations. This is how it is done:

12A Registration:

NGOs obtain 12A registration under Section 12A of the Income Tax Act, 1961. It exempts these organisations from tax on their earnings from grants, donations and other unconditional contributions. All NGOs seeking Section 12A benefits are required to register.

80G Registration:

NGOs obtain 80G registration so that their donors can claim tax deductions on contributions to the organisations. The 80G registration is designed to encourage more donations for NGOs to support their welfare activities. This is a voluntary registration available only after 12A registration.

12A and 80G Registration Benefits

For charities and NGOs, obtaining Section 12A and 80G registrations under the Income Tax Act can be a transformative step. These registrations entitle the holder of official recognition from the Income Tax Department and provide access to numerous advantages that propel the organisation's mission.

From creating a culture of openness and accountability to promoting fundraising efforts, 12A and 80G registration has enormous impact and importance.

Eligibility for 12A and 80G Registration

For 12a 80g registration, NGOs have to meet these criteria:

Eligibility Criteria for 12A Registration

Eligibility conditions for 80G Registration

Documents Required for 12A and 80G Registration

The 12a and 80g registration process online requires eligible NGOs to submit a set of documents attesting their legal status as entities. Without these documents the 12A & 80G registration applications may be considered incomplete and rejected by the concerned authorities.

12A and 80G Registration Certificate

The first registrations granted under 80G 12A registration shall be provisional and valid for three years only. A renewal of this given provisional registration have to be applied 6 months before the validity expires or inside a period of 6 months of activities starting, whichever occurs first. The renewed registrations will be granted for 5 years at a time.

12A and 80G Registration Process Online

New changes under the Finance Acts of 2020 and 2021 mean that form 10A is the primary application Form for registrations under Sections 12A and 80G of the Income Tax Act. Given below is the new and updated 12A and 80G registration process online in a step wise manner below.

• Step 1: NGO Formation and Registration

First, choose your legal framework for your NGO - trust, society or Section 8 company depending on your state law. After you are decided with the legal structure, register your organisation together with the Registrar of Societies, Registrar of Companies or another governing authority.

• Step-2: Document Collection

Collect documents necessary to file the 12A and 80G registration applications in form 10A. They include your organisation Registration certificate, MOA / Bye Laws / Trust Deed, audited financial statements, FCRA registration, NGO Darpan ID etc. These documents will attest to your NGO's existence and legitimacy.

• Step 3: Application Preparation

Fill out form 10A, the official application Form for registration under Section 12A 1and1 80G of the Income Tax Act. This particular form is readily available at the Income Tax Department's official Web site or your local Income Tax office. Include your organisation's objectives, activities and governing body members in the form.

• Step-4: Application Submission

Send the completed Form 10A and the required documentation to the Office of the Income Tax Commissioner and the Income Tax Website. This submission completes your 12A/80G registration. Keep copies of all submitted documents for yourself.

• Step-5: Review Inspection

After receiving your application, the tax authority will review its contents to make sure your NGO meets the requirements for Section 12A/80G registrations. They may even inspect your organisation's activities and financial records to verify compliance and authenticity.

• Step-6: Registration Decision

One of two scenarios will occur, depending on the review and inspection results. If your application meets the requirements and is vetted, the tax authority will register your NGO under Section 12A/80G. Or else, we may reject your application due to problems or discrepancies. You can address concerns and respond accordingly here.

• Step-7: Registration Intimation

A tax authority will issue an official registration certificate upon successful registration. This certificate verifies your NGO is eligible for Tax exemption under Section 12A/80G of the Income tax Act. It's a vital document that gives your organisation legal standing and allows you to claim tax exemptions for your NGO and its donors.

Cancellation of Registration

A Certificate under Section 12A registration or 80G registration can be cancelled under the following circumstances:

• Promotion/Benefit of Religion/Community/Caste: NGO promoting or benefiting a specific religion, community, or caste can lead to cancellation.
• Funds/Gifts from Political Parties/International Sources: Receiving non-compliant funds or gifts from political parties or international sources can result in cancellation.
• Commercial Profit-based Unit: Operating as a profit-based unit rather than focusing on charity can lead to cancellation of 80G registration.
• Member Making Commercial Profit-based Earnings: Any member earning commercial profits through NGO activities without proper accounting can result in cancellation.
• Misuse of 80G Provisions: Misuse or violation of 80G provisions, like providing false information, can lead to cancellation of exemption certificate.

12A and 80G Registration Fees

Why Choose StartupFino for 12A and 80G Registration?

StartupFino is a company that provides complete services for 12A and 80G registration. We can help with advice in the initial phase, through to ensuring you have all the requirements met and keeping your NGO in good legal standing.