Section 80G & Section 12AB Registration
80G & 12AB registrations are essential for NGOs, trusts, and charitable organizations in India seeking tax exemptions and donor benefits. Section 80G of the Income Tax Act, 1961 allows donors to claim tax deductions on donations made to registered NGOs, while 12AB registration (previously 12A) grants tax exemptions to the NGO itself. The 12AB registration is mandatory for all NGOs to continue availing tax benefits and must be renewed every 5 years.
What is 80G & 12AB Registration?
80G and 12AB are certifications granted by the Income Tax Department of India to NGOs, trusts, and non-profit organizations. These registrations help NGOs claim tax exemptions and provide tax benefits to donors, encouraging more contributions towards charitable causes.
• 80G Registration : Allows donors to claim tax deductions on their contributions to the NGO.
• 12AB Registration : Grants tax exemption to the NGO itself, enabling it to operate as a tax-free entity. It has replaced the 12A registration and is now mandatory for all NGOs seeking tax exemption.
These certifications are essential for NGOs looking to secure funding from corporates, government bodies, and international organizations.
Eligibility Criteria for 80G & 12AB Registration
To be eligible for 80G and 12AB registration, an organization must be legally registered as a Trust, Society, or Section 8 Company and engage in charitable or religious activities that serve a clear social purpose. The organization should ensure that no profits are distributed among its members and that all income is utilized for charitable purposes. Maintaining proper books of accounts and complying with tax regulations is mandatory to ensure transparency and legal adherence. Additionally, the organization must ensure that donations are not used for business or commercial activities, as this can lead to disqualification from tax benefits.
Minimum Requirements for FCRA Registration
The organization must be registered as a Trust, Society, or Section 8 Company under Indian law
The NGO should be actively working and have a proven track record.
The organization must have spent at least ₹15 lakh in the last three years on its objectives
The NGO must open a FCRA-designated bank account with State Bank of India, New Delhi Main Branch
The NGO should be registered on NGO Darpan (mandatory for FCRA application)
Benefits of 80G & 12AB Registration
- Tax Exemption for NGOs : NGOs receive a tax exemption on income generated for charitable purposes.
- Donor Tax Deduction (80G) : Donors can claim deductions of up to 50% or 100% on eligible donations.
- Increased Credibility : Enhances donor confidence and attracts corporate CSR contributions.
- Eligibility for Government & CSR Funding : Many grants require 80G & 12AB certification.
- Compliance with Tax Regulations : Ensures NGOs operate within the legal framework of the Income Tax Act.
- Renewal for Continued Benefits : 12AB registration is valid for 5 years, requiring timely renewal.
Important Points to Note
- 12AB replaces 12A, making it mandatory for tax exemption.
- Renewal is required every 5 years for continued benefits.
- Proper financial records and audit reports must be maintained.
- Donations must be used strictly for charitable activities.
- Non-compliance may lead to revocation of tax benefits.
Advantages of 80G & 12AB Registration
Encourages More Donations
Long-term Tax Planning
Recognition from Authorities
Transparency & Compliance
No Tax on Surplus Income
Validity for 5 Years
Process of 80G & 12AB Registration
The registration process usually takes 3-6 months, depending on the processing time and verification process by the authorities.
Prepare Necessary Documents :
- Gather all required documents, including registration certificates and financial reports.
File an Online Application :
- Submit Form 10A (for 12AB) and Form 10G (for 80G) on the Income Tax Department’s online portal.
Verification by IT Department :
- Authorities review documents and may request additional details.
Approval & Registration :
- Upon successful verification, a unique 80G & 12AB registration certificate is issued.
Compliance & Renewal :
- NGOs must renew 12AB registration every 5 years and maintain proper annual filings.
Verification by MHA :
- The Ministry of Home Affairs reviews the application and documents.
Grant of FCRA Certificate :
- If approved, the NGO receives FCRA Registration valid for five years.
Documents Required
To facilitate a seamless registration process, please ensure that the necessary documents are readily available.
NGO Registration Certificate
PAN Card of the NGO
Form 10A (New Registration) / Form 10AB (Renewal)
Audited Financial Statements
Annual Reports, Bank Account Details
Details of Trustees/Directors
Activity Reports
Bank Account Details
NGO Registration Certificate
PAN Card of the NGO
Form 10A (New Registration) / Form 10AB (Renewal)
Audited Financial Statements
Annual Reports, Bank Account Details
Details of Trustees/Directors
Activity Reports
Bank Account Details
NGO Registration Certificate
PAN Card of the NGO
Form 10A (New Registration) / Form 10AB (Renewal)
Audited Financial Statements
Annual Reports, Bank Account Details
Details of Trustees/Directors
Activity Reports
Bank Account Details
NGO Registration Certificate
PAN Card of the NGO
Form 10A (New Registration) / Form 10AB (Renewal)
Audited Financial Statements
Annual Reports, Bank Account Details
Details of Trustees/Directors
Activity Reports
Bank Account Details
Conclusion
80G & 12AB registration is crucial for NGOs and charitable institutions in India, providing tax benefits, credibility, and funding opportunities. With 12AB replacing 12A, organizations must ensure timely renewal and compliance with tax regulations. NGOs in Hyderabad and across India should secure 80G & 12AB certification to attract donations, gain government recognition, and sustain long-term charitable operations.
If you need assistance with 80G & 12AB registration, we are here to help!
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