About 80G registration for NGO
80G is a registration certificate provided by the Income Tax Department of India to eligible Non-Governmental Organizations (NGOs) and charitable trusts. This registration certificate provides tax exemption to donors who donate to these organizations.
When a donor donates to an NGO registered under 80G, they can claim a tax deduction on their donated amount while filing their Income Tax returns. This tax benefit acts as an incentive for donors to donate generously to NGOs and helps in fundraising for the NGO.
Moreover, 80G registration adds credibility to the NGO and helps in attracting more donors. Many corporate companies and individuals prefer to donate to registered NGOs to avail of tax benefits, and this, in turn, helps NGOs to raise more funds for their projects and activities.
To obtain 80G registration, an NGO must fulfill certain eligibility criteria and submit the required documents to the Income Tax Department. Once the NGO receives the certificate, it is valid for a certain period, and the NGO must renew the certificate before the expiry date.
Document Requirement for 80G Registration of Trust:
The following documents are generally required for 12A registration in India:
- Trust Deed: The trust deed is the most important document required for 80G registration. It should be properly executed and registered with the concerned authority.
- Registration Certificate: The trust must be registered under Section 12A of the Income Tax Act, and a copy of the registration certificate must be submitted with the application.
- PAN Card: A copy of the Permanent Account Number (PAN) card of the trust must be submitted.
- Audited Financial Statements: The trust must submit audited financial statements for the previous three years, including the balance sheet, income and expenditure statement, and receipts and payments statement.
- Details of Trustees: The trust must provide details of its trustees, including their names, addresses, and PAN numbers.
- Project Details: The trust must provide details of its charitable activities and projects, including the area of operation, beneficiaries, and expected outcomes.
- Other Documents: The trust may be required to submit additional documents, such as a letter of undertaking that the trust will use the donations for charitable purposes only.
Document Requirement for 80G Registration of Society:
The following documents are generally required for 80G registration for a society in India:
- Memorandum of Association: The Memorandum of Association is the most important document required for 80G registration. It should be properly executed and registered with the concerned authority.
- Registration Certificate: The society must be registered under the Societies Registration Act, and a copy of the registration certificate must be submitted with the application.
- PAN Card: A copy of the Permanent Account Number (PAN) card of the society must be submitted.
- Audited Financial Statements: The society must submit audited financial statements for the previous three years, including the balance sheet, income and expenditure statement, and receipts and payments statement.
- Details of Office Bearers: The society must provide details of its office bearers, including their names, addresses, and PAN numbers.
- Project Details: The society must provide details of its charitable activities and projects, including the area of operation, beneficiaries, and expected outcomes.
- Other Documents: The society may be required to submit additional documents, such as a letter of undertaking that the society will use the donations for charitable purposes only.
Document Requirement for 80G Registration of Section-8 Company:
The following documents are generally required for 80G registration of a Section-8 Company in India:
- Memorandum of Association: The Memorandum of Association is the most important document required for 80G registration. It should be properly executed and registered with the concerned authority.
- Certificate of Incorporation: The Section-8 Company must be registered with the Registrar of Companies, and a copy of the Certificate of Incorporation must be submitted with the application.
- PAN Card: A copy of the Permanent Account Number (PAN) card of the company must be submitted.
- Audited Financial Statements: The company must submit audited financial statements for the previous three years, including the balance sheet, income and expenditure statement, and receipts and payments statement.
- Details of Directors: The company must provide details of its directors, including their names, addresses, and PAN numbers.
- Project Details: The company must provide details of its charitable activities and projects, including the area of operation, beneficiaries, and expected outcomes.
- 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.
Process of 80G registration for NGO
To register for an 80G registration for NGO certificate, which is a certificate for income tax exemption for charitable trusts and non-profit organizations in India, you need to follow these steps:
Step 1: Obtain 12A registration – The trust, society or Section-8 Company should first obtain registration under Section 12A of the Income Tax Act. This registration is a prerequisite for obtaining an 80G certificate.
Step 2: Prepare and submit the application – Once the organization has obtained 12A registration, it can prepare and submit an application for 80G registration to the Income Tax Department.
Step 3: Submit required documents – Along with the application form, the organization must submit all the necessary documents such as the trust deed or MOA, registration certificate, PAN card, audited financial statements, project details, and other relevant documents.
Step 4: Verification and inspection – After receiving the application and documents, the Income Tax Department may verify the information provided and conduct an inspection of the organization’s operations and financials to ensure that it is engaged in genuine charitable activities.
Step 5: Issue of 80G certificate – If the Income Tax Department is satisfied with the organization’s application and finds it to be a genuine charitable institution, it will issue an 80G certificate to the organization.
Compliance to do After Obtaining 80G Registration
After obtaining 80G registration for NGO, the organization needs to comply with certain requirements to maintain its registration status and enjoy tax benefits under the Income Tax Act. Some of the compliance requirements are:
- Maintain Proper Books of Accounts: The organization must maintain proper books of accounts, including all receipts and payments, donations received, and expenses incurred. The accounts should be audited by a qualified auditor every year and submitted to the Income Tax Department.
- Use Donations for Charitable Purposes Only: The organization must use the donations received for charitable purposes only and maintain proper records of the utilization of the funds.
- File Annual Returns: The organization must file an annual return with the Income Tax Department in Form 10B, which should include all relevant details such as the amount of donations received, details of projects undertaken, and utilization of funds.
- Display 80G Certificate: The organization must display its 80G certificate prominently at its office and on its website, if any.
- Follow Other Tax Rules and Regulations: The organization must comply with all other tax rules and regulations, such as filing income tax returns on time, deducting and depositing TDS, and maintaining proper documentation and records.
- Renewal of 80G Registration: The 80G registration is valid for a limited period, and the organization must renew its registration before it expires to continue enjoying tax benefits under the Income Tax Act.
Top 10 advantages of 80G registration for NGO
Here are the top 10 advantages of 80G registration for charitable trusts and non-profit organizations in India:
- Tax Deduction for Donors: Donors who make donations to an organization with 80G registration can avail of tax deductions on their taxable income. This can encourage more individuals and businesses to make donations to the organization.
- Increased Credibility: 80G registration provides credibility and legitimacy to the organization and can help to build trust with donors and the general public.
- Eligibility for Government Grants: Organizations with 80G registration are eligible to receive grants and funds from the government for their charitable activities.
- Access to Corporate Social Responsibility (CSR) Funds: Companies can allocate their CSR funds to organizations with 80G registration, which can help to attract more donations and support for the organization.
- Exemption from Tax on Certain Sources of Income: Organizations with 80G registration may be exempt from tax on certain sources of income, such as donations received from a foreign source or a charitable trust.
- Increased Visibility: Organizations with 80G registration can get increased visibility in the media, which can help to attract more donors and supporters.
- Eligibility for FCRA Registration: Organizations with 80G registration are eligible to apply for Foreign Contribution Regulation Act (FCRA) registration, which allows them to receive foreign donations.
- Attract Qualified Staff and Volunteers: Organizations with 80G registration are more likely to attract qualified staff and volunteers who are interested in working for a legitimate and credible organization.
- Better Fund Management: Organizations with 80G registration are required to maintain proper books of accounts and financial records, which can help to improve fund management and accountability.
- Long-term Sustainability: 80G registration can help to ensure the long-term sustainability of the organization by attracting more donors, supporters, and volunteers, and by increasing access to funding and grants.
Overall, obtaining 80G registration can provide several advantages to non-profit organizations, which can help to support their charitable activities and improve their impact on the community.