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What is 12A ?

Obtaining 12A Registration, provided by the Income Tax Department, is a significant step for trusts and nonprofit organizations aiming to secure an exemption from income tax payments. This registration, a one-time process, offers income tax exemptions for entities like Section 8 Companies, Trusts, and NGOs on their surplus income.

The primary purpose of obtaining this registration is to secure an exemption from income tax payments. Entities that acquire 12A registration are entitled to income tax exemptions on the surplus income they generate

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What is 80G?

Under the Indian Income Tax Act, Section 80G refers to a provision that allows for deductions on donations made to certain charitable organizations and funds. Donors contributing to institutions or funds approved under Section 80G can claim a deduction from their taxable income.

Entities eligible for Section 80G approval are typically trusts, NGOs, charitable institutions, and specific government funds. Individuals and corporations donating to these approved entities can avail of tax benefits by deducting the donated amount from their taxable income, subject to specified limits and conditions outlined in Section 80G of the Income Tax Act.

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Documents Required :

• NGO's PAN copy
• Registration Certificate & Memorandum of Association for Section 8 Companies
• Trust Deed for Trusts
• Form 10A for 12A registration
• Form 10G for 80G registration
• Address proof of the organization's registration location
• Copies of utility bills (e.g., electricity, water, etc.)
• Financial records for the past three years or since inception
• Activity and Progress/Project Report for the last three years
• Detailed list of donors with their information
• Bank account statements for the last three years

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Procedure for 12A :

Detailed Procedure for 12A Certificate Registration:

1. Preparation and Application Submission:

   • Gather all necessary documents, including the NGO's trust deed, memorandum, articles of association, and financial statements.

   • Access the Income Tax website (incometaxindiaefiling.nic.in) and log in.

   • Find and fill out Form 10A, which serves as the application for 12A Certificate registration.

   • Submit the completed Form 10A online through the Income Tax Forms Section.

2. Commissioner's Review:

   • Upon submission, the Commissioner of Income Tax evaluates the application and documents.

   • Verification of the NGO's activities is conducted to ensure alignment with the objectives stated in the submitted documents.

   • The Commissioner may request additional documents or information for verification purposes.

3. Verification and Decision:

   • The Commissioner conducts a thorough examination of the submitted materials and the genuineness of the NGO's operations.

   • If satisfied with compliance and authenticity, the Commissioner issues a written order granting the 12A Registration.

   • Any concerns or inadequacies identified may prompt the Commissioner to raise queries or issues, allowing the applicant an opportunity to address them.

4. Grant or Rejection:

   • Upon review and verification, if satisfied, an order granting the 12A Registration is issued.

   • If not convinced or discrepancies are identified, the application may be rejected.

   • In case of rejection, the applicant is usually given an opportunity to present their case or rectify deficiencies before a final decision.

5. Receipt of 12A Certificate:

   • Upon successful verification and approval, the NGO receives the official 12A Certificate from the Income Tax Department, enabling them to avail of income tax exemptions on surplus income.

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Procedure for 80g:

Detailed Procedure for 80G Certificate Registration:

1. Preparation and Form Submission:

   • Fill out Form 10G, the application for 80G registration, with accurate details.

   • Gather and submit the necessary documents along with Form 10G to the Jurisdictional Principal Commissioner or Income Tax Commissioner (Exemptions).

2. Commissioner's Review and Document Verification:

   • Upon receiving the application, the Commissioner examines the submitted documents and verifies the authenticity of the NGO's activities.

   • Additional documents or information may be requested by the Commissioner if necessary for verification purposes.

3. Evaluation and Order for Registration:

   • If satisfied with compliance and authenticity, the Commissioner issues a written order granting the 80G Registration.

   • In cases of concerns or inadequacies, the Commissioner may reject the application.

   • If rejected, the applicant is typically given an opportunity to address issues or rectify deficiencies to appeal the decision.

4. Receipt of 80G Certificate:

   • Upon successful verification and approval, the NGO receives the official 80G Certificate from the Income Tax Department.

   • The 80G Certificate allows donors to claim tax deductions on their donations to the NGO, incentivizing contributions.

5. Maintenance of Compliance:

   • Post-registration, the NGO must maintain compliance with regulations outlined under Section 80G to retain the validity of the certificate.

   • Timely filing of reports and adherence to stipulated guidelines are essential for ongoing compliance.

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Why choose Ecfile for 12A and 80G Registration:

Accuracy and Compliance: They assist in ensuring that the application meets compliance standards and is accurate, reducing the chances of errors or omissions that could lead to application rejection.

Document Management: They facilitate the proper organization and management of required documents, ensuring all necessary paperwork is submitted correctly.

Expertise and Updates: These services often have experts who are well-versed with the regulatory requirements. They keep track of any changes in rules or procedures, ensuring your application is up-to-date and compliant.

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