Updated on April 14, 2025 04:44:00 PM
In India, 12A and 80G registrations are very important for NGOs to operate effectively within the legal and financial frameworks. The Income Tax Department grants these registrations, which provide crucial tax benefits that significantly enhance the operational capabilities of NGOs, allowing them to focus on their charitable work.
12A Registration: The NGOs are exempted from paying taxes on the income they generate, provided that the money is used for purely charitable purposes. This exemption ensures that the NGO can use its earnings to pursue its mission without the added burden of paying taxes on the income. Obtaining 12A registration establishes the NGO's legitimacy as a charitable entity and aligns it with the requirements of the Income Tax Act.
80G Registration is also equally important, as it gives donors tax deductions for their contributions to the NGO. This encourages more people and corporations to donate, knowing that they will receive a financial benefit in the form of reduced taxable income. Donations to NGOs with 80G registration can be deducted either 50% or 100% of the donated amount, depending on the type of NGO. All these registrations collectively strengthen the credibility of NGOs while promoting long-term sustainability and a culture of giving.
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In India, 12A and 80G registrations are required for NGOs that seek to work for charitable purposes and function according to the Income Tax Act. These registrations provide most of the tax benefits and enhance trust and transparency of the NGO among the donors, supporters, and the general public.
Registration under 12A for NGOs: 12A registration is granted to NGOs so that they are exempted from paying income tax on the income generated through their charitable activities. This means surplus funds of the NGO if used for its charitable purpose, do not fall under tax. To become eligible for 12A registration, an NGO has to prove that its income is used for charity or social welfare. After getting registered under 12A, the NGO gets recognized by the Income Tax Department as a tax-exempt organization, which in turn makes it more attractive for donations and grants.
80G Registration for NGOs80G registration provides tax deductions for donors against the contribution made to an NGO. Based on the category of the NGO, donors can get either 50% or 100% of the amount donated as a deduction from their taxable income. This registration provides a stimulus for people and organizations to donate to the NGO, thus increasing the funds for the programs run by it.
In India, registration under the provisions of 12A and 80G is an important certification for non-profit organizations like Trusts that allow such organizations to work much more efficiently in fulfilling their objectives. Here are ways in which these registrations aid such organizations::
To apply for 12A and 80G registration for NGOs must provide specific documents to establish their eligibility and compliance. Below is a comprehensive list:
Applying for 12A and 80G registration for NGOs involves a streamlined online process through the Income Tax Department’s e-filing portal. Here is a step-by-step guide:
There are no fees levied by the Income Tax Department for the 12A and 80G registration process for NGOs
| Category | Details | Approximate Cost (₹) |
|---|---|---|
| Government Fees | No direct fees for Form 10A (12A) or Form 10G (80G) | ₹0 |
| Document Preparation | Auditing, drafting financial statements, and legal documents | ₹5,000 – ₹15,000 |
| Follow-ups and Representation | Additional charges for handling queries or objections | ₹5,000 – ₹10,000 |
| Total Estimated Cost | Combined cost for professional and other services | ₹10,000 – ₹50,000 |
Note: Although the fee is variable, the entire cost will depend upon the level of applicability and the requirement for professional aid.
For 12A and 80G registrations, for NGOs, there is the jurisdiction of the Income Tax Act while these need periodical renewals under the existing latest rules of renewal.
12A The initial registration given was a lifetime registration with no expiry date. However, in the Finance Act, 2020, amendments introduced the renewal for NGOs for maintaining 12A registration. This renewal is not only compulsory the first time at the end of the deadline set but also 5 years afterward.
Similarly, 80G Registration also operates on a renewal basis after the Finance Act, 2020. The registrations issued before this without an expiry date have to be revalidated. After revalidation, the registration is valid for 5 years and has to be renewed thereafter.
Changes facilitate societies to avoid regulatory noncompliance, preserve transparency in transactions, and claim tax benefits while continuing their activity. Societies must renew, so that nothing interrupts their exempt status and access to donor rewards. Monitoring activity and applying early enough for a renewal are all the more imperative to ensure seamless validity of both 12A and 80G registrations.
Conclusion
12A and 80G registrations are very essential for non-profit organizations and NGOs to work transparently and efficiently under the legal and tax framework of India. It is not only beneficial for tax exemptions for the organization but also benefits the donor in terms of tax deductions, which in turn encourages more monetary support for charity. The 12A registration provides the society with income tax exemptions on funds used for its charitable purposes, while the 80G registration encourages donations by offering tax deductions to donors.
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Frequently Asked Questions (FAQs)
12A registration provides income tax exemptions to charitable NGOs, allowing them to utilize surplus funds for their social and charitable purposes without paying tax on it. It ensures that the society's income is not taxed, as long as it is used for the society's charitable activities.
80G registration allows donors to claim tax deductions on donations made to the society. It incentivizes contributions to charitable organizations by reducing the donor’s taxable income, either by 50% or 100%, depending on the society’s category.
There are no government fees for filing applications for 12A and 80G. However, NGOs may incur professional fees for document preparation and submission, which typically range between ₹10,000 and ₹50,000, depending on the complexity of the application.
Yes, NGOs can apply for both 12A and 80G registrations at the same time. However, 12A registration must be obtained first, as 80G registration requires the NGOs to already have 12A status.
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