Step-by-Step Guide to Provisional 12A and 80G Registration

Newly formed societies and trusts are granted provisional 12A and 80G registration . These registrations empower them to operate as they strive to build their track records and meet the precise conditions for permanent registration. The following are some potential benefits:

Benefits of Provisional 12A Registration

• Income Tax Exemption:
  Trusts and societies that have provisional 12A registration can benefit from exemption from income tax, thereby ensuring that the funding used for charitable interests escapes taxation.
• Financial Relief:
  Since the organization gets an exemption from taxation, this enables the organization to save money on taxes and divert extra funds from its taxation payment to diverse charitable activities for continuing its operation in the early stages.
• Legal Compliance: Provisional 12A registration is said to be done in order to meet with income tax compliance regulations to avoid legal consequences.
• Foundation for Permanent Registration: With provisional registration, there is a window of 3 years to establish the organization’s credibility and its operational record, which is required for permanent 12A registration.
• Sustainable Impact: With the possibility of facilitating tax benefits for interested donors, contributions can be made one-off, but even more determined efforts can produce greater returns on investment. A stable funding source allows NGOs to make generous financial commitments and, consequently, allows long-term project planning and implementation.
• Proper Utilization of Resources: With 12A registration, an NGO follows rigorous funding management and must apply funds only for charitable purposes. This ensures optimal utilization of the resources for the organization's stated goals.

Benefits of Provisional 80G Registration

• Encourages Donations:
  Provisional registration under the 80G grant enables the donors to claim tax benefits on their contributions, thus assisting new organizations in attracting funding.
• Builds Credibility:
  Possession of registration under 80G builds up the confidence of prospective donors, as it shows commitment toward transparency and compliance.
• Access to Corporate Donations:
  Corporate bodies can now donate to the organizations registered provisionally for 80G registration under the CSR schemes, providing them with more material resources to work.
• Strengthens Financial Base:
  The tax deduction in favor of donors allows societies and trusts to get greater donations at the early stages, thus strengthening their financial standing.

To apply for 12A and 80G Provisional, NGOs, Trusts, Societies, and Section 8 Companies must provide specific documents to establish their eligibility and compliance. Below is a comprehensive list: