OVERVIEW
12A Registration for NGO is a process in India for obtaining an exemption from income tax for a charitable trust, Society, or Section-8 Company. It is granted to trusts or societies or Section-8 Companies that operate for charitable purposes and meet the requirements set forth by the Income Tax Department. The registration is granted under section 12A of the Income Tax Act, 1961, and is necessary for a trust to be eligible for tax exemptions on its income.
The benefits of 12A Registration include exemption from income tax on the trust, Society, or Section-8 Company income, the ability to apply for government grants, and the eligibility for tax-deductible donations from donors.
To be eligible for 12A Registration, a Trust, Society, or Section-8 Company must be registered as a charitable trust or society and have a clear and defined charitable objective. It must also have a proper governing body, a bank account in the name of the Trust, Society, or Section-8 Company, and maintain proper books of accounts.
The process for 12A Registration involves applying with the Income Tax Department, along with the required documents and fees. The application is reviewed by the department, and if approved, the registration certificate is issued. The registration must be renewed periodically, and the trust or institution must comply with the regulations and laws governing charitable trusts in India.
In summary, 12A Registration is a crucial process for Trust, Society, or Section-8 Company operating for charitable purposes in India. It provides tax exemptions and other benefits, enabling them to operate smoothly and fulfill their charitable objectives.
DOCUMENTS REQUIRED
Document Requirement for 12A Registration for NGO
The following documents are generally required for 12A Registration in India:
- A copy of the trust deed or memorandum of association, along with any amendments.
- A copy of the PAN card of the trust.
- A copy of the Aadhaar card and photograph of each trustee or board member.
- Details of the trustees or board members, including their names, addresses, and occupations.
- Copy of the property documents if the trust owns any immovable property.
- Bank statements and financial statements of the trust for the last three years.
- Details of the sources of the trust’s income and the utilization of funds.
- An affidavit from the trustees or board members stating that the trust’s income will be used for charitable purposes only and that the trust will comply with the regulations and laws governing charitable trusts.
- Any other documents that the Income Tax Department may require for 12A registration.
Document Requirement for 12A Registration of Society:
The following documents are generally required for 12A registration for a society in India:
- A copy of the society’s memorandum of association, along with any amendments.
- A copy of the society’s registration certificate.
- A copy of the society’s PAN card.
- A copy of the Aadhaar card and photograph of each member of the managing committee.
- Details of the managing committee members, including their names, addresses, and occupations.
- Copy of the property documents if the society owns any immovable property.
- Bank statements and financial statements of the society for the last three years.
- Details of the sources of the society’s income and the utilization of funds.
- An affidavit from the managing committee members stating that the society’s income will be used for
- charitable purposes only and that the society will comply with the regulations and laws governing
- societies and charitable trusts.
- Any other documents that the Income Tax Department may require for 12A registration.
Document Requirement for 12A Registration of Section-8 Company:
The following documents are generally required for 12A registration of a Section-8 Company in India:
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A copy of the Section-8 Company’s memorandum of association and articles of association, along with any amendments.
- A copy of the Section-8 Company’s registration certificate.
- A copy of the Section-8 Company’s PAN card.
- A copy of the Aadhaar card and photograph of each member of the board of directors.
- Details of the board of directors, including their names, addresses, and occupations.
- Copy of the property documents if the Section-8 Company owns any immovable property.
- Bank statements and financial statements of the Section-8 Company for the last three years.
- Details of the sources of the Section-8 Company’s income and the utilization of funds.
- An affidavit from the board of directors stating that the Section-8 Company’s income will be used for charitable purposes only and that the Section-8 Company will comply with the regulations and laws governing Section-8 Companies and charitable trusts.
- Any other documents that the Income Tax Department may require for 12A registration.
REGISTRATION PROCESS
Process of 12A Registration for NGO
To register for a 12A Registration for NGO which is a certificate for income tax exemption for charitable trusts and non-profit organizations in India, you need to follow these steps:
- Obtain the necessary documents: You will need to have the trust deed, memorandum of association, articles of association, registration certificate, and any other relevant documents.
- Create an account on the Income Tax Department’s e-filing portal: You will need to create an account on the Income Tax Department’s e-filing portal.
- Fill out Form: Once you have created your account, you can fill out Form 10A, which is the application form for registration under section 12A of the Income Tax Act.
- Submit the form: After filling out Form, you will need to submit it electronically through the Income Tax Department’s e-filing portal.
- Wait for processing: After submitting the form, you will need to wait for the Income Tax Department to process your application. This can take several weeks or even months.
On obtaining your 12A Registration certificate for income tax exemption for your charitable trust or non-profit organization in India! Now that you have obtained the registration, you need to comply with certain requirements to maintain your eligibility for tax exemption. Here are some of the compliance requirements you need to follow:
- File annual income tax returns: As a registered charitable trust or non-profit organization, you are required to file annual income tax returns with the Income Tax Department. Even if you don’t have any income or have earned income that is exempt under the Income Tax Act, you still need to file a return.
- Maintain proper accounts and records: You need to maintain proper accounts and records of all your income and expenses. These records should be audited by a qualified chartered accountant and submitted to the Income Tax Department annually.
- Use the funds for charitable purposes only: You are required to use the funds of your trust or non-profit organization only for charitable purposes. You need to ensure that the funds are not used for any other purpose, such as personal gain or profit.
- Comply with other applicable laws: You need to comply with other applicable laws, such as the Foreign Contribution Regulation Act (FCRA) and the Goods and Services Tax (GST) Act, if applicable.
Renew your provisional registration: Your 12A Registration for NGO certificate is valid for a period of 3 years. You need to renew your registration after the expiry of the certificate
Here are the top 10 advantages of 12A Registration for NGO and non-profit organizations in India:
- Tax exemption: Charitable trusts and non-profit organizations registered under section 12A of the Income Tax Act are exempt from paying income tax on their income and donations received.
- Eligibility for government funding: Many government schemes and programs provide funding and support only to registered charitable trusts and non-profit organizations.
- Increased credibility: 12A registration provides increased credibility and legitimacy to your organization, as it is a recognized form of legal entity in India.
- Tax benefits for donors: Donors who contribute to a registered charitable trust or non-profit organization can claim tax deductions under section 80G of the Income Tax Act.
- Increased donations: Tax exemption and tax benefits for donors can lead to increased donations to your organization.
- Better financial management: Charitable trusts and non-profit organizations are required to maintain proper accounts and records under 12A registration, which can lead to better financial management practices.
- Ability to receive foreign donations: Charitable trusts and non-profit organizations registered under 12A can receive foreign donations under the Foreign Contribution Regulation Act (FCRA).
- Eligibility for corporate social responsibility (CSR) funding: Many companies in India are required to spend a portion of their profits on CSR activities, and often prefer to donate to registered charitable trusts and non-profit organizations.
- Increased opportunities for collaborations: Registered charitable trusts and non-profit organizations have increased opportunities for collaborations with other organizations, including government agencies, NGOs, and private sector companies.
- Ability to participate in government tenders: Registered charitable trusts and non-profit organizations are often eligible to participate in government tenders for goods and services.
Overall, 12A Registration for NGO provides many benefits and advantages to charitable trusts and non-profit organizations, making it an important step for those looking to establish a credible and sustainable organization in India.