80G and 12A Registration

What is 80G and 12A Registration?

An 80G Certificate in India is a legal document granted by the Income Tax Department to an NGO or non-governmental organization such as a Section 8 Company or a charitable trust. The 80G Certificate is issued to encourage and promote the donors to contribute funds into such NGOs or non- profit organizations. Moreover, when the donor makes donations to such an organization, they will get a tax exemption of 50% and also they become qualified to deduct such sum from their Gross Total Income. Furthermore, in order to obtain the tax exemption, the donor has to file the stamped receipt or document as evidence of the donation made. Such a receipt or document should have the name of the donor, date of contribution or donation made, and PAN number of the organization.
12A registration is a one-time registration which is granted by the Income Tax Department to trusts and other not for profit organisations. The purpose of the registration is to be exempted from the payment of income tax. 12A registration is generally applied for immediately after incorporation. Section 8 Companies, Trusts and NGOs which have obtained 12A registration enjoy exemption from paying income tax on their surplus income. The 12A registration facility is available for all non-profit entities. Hence, it is necessary for all Trusts, NGOs and other Not-for-Profit organisations to be aware of Section 12A of the Income Tax Act. The purpose of the present article is to discuss the procedure for obtaining 12A registration.