Non-Governmental Organizations (NGOs) play a vital role in social development, education, healthcare, poverty alleviation, and environmental protection. To ensure financial sustainability and attract more donations, NGOs must obtain 12A and 80G Registration.
While 12A Registration provides income tax exemption for NGOs, 80G Registration allows donors to claim tax deductions, making fundraising easier. These registrations enhance an NGO’s credibility, transparency, and funding opportunities, making them eligible for government grants, CSR Funds, and foreign contributions under FCRA Registration.
What is 12A and 80G Registration?
1. 12A Registration – Tax Exemption for NGOs
12A Registration is a one-time registration that provides an NGO with income tax exemption under the Income Tax Act, 1961. Once registered, the NGO’s income is not taxable, allowing it to utilize funds entirely for its charitable activities.
2. 80G Registration – Tax Benefits for Donors
80G Registration allows individuals and businesses who donate to an NGO to claim tax deductions. This means donors can reduce their taxable income while supporting a social cause, making NGOs more attractive for funding.
Why NGOs Need 12A and 80G Registration
1. Tax Exemption for NGOs
One of the biggest advantages of 12A Registration is complete exemption from income tax. NGOs that do not have 12A Registration must pay taxes on their income, which reduces the funds available for charitable activities.
2. More Donations from Individuals and Corporates
With 80G Registration, donors can claim tax deductions, encouraging more people and businesses to contribute. Corporate companies prefer donating to 80G-registered NGOs as they receive tax benefits under CSR Applicability.
3. Eligibility for CSR Funds
NGOs planning to receive Corporate Social Responsibility (CSR) funding from businesses must have:
• NITI Aayog Registration
Without these registrations, companies are unlikely to donate, as they must ensure compliance under CSR laws.
4. Compliance with Government Grant Requirements
Many government grants require NGOs to have 12A and 80G Registration. Without these registrations, NGOs may not be eligible for:
• Government-funded social programs
• Grants from ministries and welfare departments
• International funding through FCRA Registration
5. Transparency & Trustworthiness
Donors, corporate sponsors, and grant providers prefer funding legally registered NGOs. Having 12A and 80G Registration enhances credibility and builds trust with donors.
Eligibility Criteria for 12A and 80G Registration
To apply for 12A and 80G Registration, an NGO must:
• Be a legally registered Trust, Society, or Section 8 Company
• Have charitable objectives (education, healthcare, environment, etc.)
• Ensure that profits are reinvested for the organization’s mission
• Maintain proper financial records and audit reports
How 12A and 80G Registration Helps in CSR & FCRA Compliance
1. CSR-1 Registration & CSR Funds
• Companies that meet CSR Applicability requirements must donate 2% of their net profits to CSR Activities.
• NGOs with CSR-1 Registration and 80G Registration are preferred for receiving CSR Funds.
2. FCRA Registration for Foreign Funding
• FCRA Full Form: Foreign Contribution Regulation Act
• FCRA Registration is required for NGOs to legally receive foreign donations.
• NGOs must first obtain 12A and 80G Registration before applying for FCRA Registration.
• Check FCRA Renewal Status regularly via FCRA Online Services.
Step-by-Step 12A and 80G Registration Process Online
Step 1: Obtain NITI Aayog Registration
Before applying for 12A and 80G Registration, NGOs should register with NITI Aayog on the NGO Darpan Portal to get a Unique Identification Number (UIN) for government funding.
Step 2: Apply for 12A Registration
1. Visit the Income Tax Department Portal and file Form 10A.
2. Submit the required documents (listed below).
3. The Income Tax Commissioner reviews the application and may request additional documents.
4. Upon approval, the NGO receives the 12A Registration Certificate, granting income tax exemption.
Step 3: Apply for 80G Registration
1. After obtaining 12A Registration, file Form 10G for 80G Registration.
2. Submit details of past activities, donor lists, and financial records.
3. The Income Tax Department verifies the documents and issues the 80G Certificate.
Documents Required for 12A and 80G Registration
• PAN Card of the NGO
• Trust Deed / Section 8 Company Incorporation Certificate
• MOA & AOA (Memorandum and Articles of Association)
• NITI Aayog Registration Certificate
• CSR-1 Registration Certificate (if applying for CSR Funds)
• Bank Account Details & Financial Statements
Common Mistakes to Avoid in 12A and 80G Registration
• Not maintaining proper financial records
• Applying without NITI Aayog Registration (required for CSR and government grants)
• Failing to submit activity reports and past donation details
• Missing deadlines for renewals and compliance filings
Conclusion
12A and 80G Registration provide NGOs with income tax exemptions and donor tax benefits, making fundraising easier. These registrations also make NGOs eligible for CSR Funds, government grants, and FCRA Registration. By completing the 12A and 80G Registration process online, organizations can enhance their credibility, compliance, and financial stability.
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