Startup India Registration from Wellcorp
80G & 12A Registration - an Overview:
Section 80G of the Income Tax Act, 1961, allows a deduction from taxable income of donations made to certain specified institutions or funds. The deduction is subject to a limit of 50% of the donated amount. Section 12A of the Income Tax Act, 1961, provides for a 100% deduction from taxable income of donations made to certain specified funds.
Section 80G provides tax benefits to donors who make contributions to your organization. While there is no direct benefit to the NGO itself, this gives an incentive for people to donate which will increase your overall donations. This is especially true when the donations are sizable or come from organisations.
Section 12A registration allows the income tax authorities to recognize an organisation (any NGO) as established for charitable purposes. This means they will not tax the income of these institutions, be it donations or capital gains, as they would for an entity operating for profit.
Benefits of Registering Under 80G & 12A Registration
1. Registration under section 80G allows your donors to avail tax benefits which in turn increases your donation receipts. Whereas Registration under Section 12A provides tax benefits for the Organization.
2. Can receive donations from individuals and corporates in a tax-efficient manner.
3. It builds the credibility and accountability of the trusts/institution/Organisation and be recognised as a Chartible Organization.
4. Along with benefits available to the donor, it helps to raise funds for specific projects/activities.
5. You can be recognized as a charitable organisation and receive grants.
6. An organization shall be registered to avail tax relief for funding from donor agencies & foreign donations.
Procedure for Section 80G & 12A Registration Online
Below is the 80g registration process & 12A registration procedure:
Timeline and Validity
The overall process and the approval can take around 1 month to come through. An organization can apply for this as soon as they have their incorporation certificate. For example, trust deed in case of trust, Certificate of Incorporation in case of Section 8 Companies.
Section 80G and 12A used to be one-time registration. However, recently the government has stipulated that it is valid for only 5 years and the Organizations have to revalidate it after that.
Revalidation of Section 80G & 12A Registration
Before the end of the 5 year validity period, NGOs can revalidate their registration online through the e-filing portal of the IT department. Form 10A will be available under the e-File tab. Once you fill out your form and submit it along with the necessary documents, the revalidation process will begin.
Document Required for Section 80G & 12A Registration
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