PROCEDURE FOR REGISTRATION UNDER SECTION 12A AND 80G

PROCEDURE FOR REGISTRATION UNDER SECTION 12A AND 80G

After formation of NGO(Visit my previous blog regarding Society Formation- http://www.ngoandtaxconsultant.in/2013/01/uttar-pradesh-society-registration-ngos.html ), the next step is to get your NGO registered for 12A and 80G certificate under Income Tax Act, 1961. These certificates are required so that the Income of the non profitable organization are exempt from tax as well as the donation given to such institutions get some exemption to the donee.

First we will discuss the types of income a NGO can get. NGO can get donation from various private individuals as well as from foreign nationals. NGO's can also avail government grants, which are provided for some specific project and after fulfilling some specific criteria. These incomes are taxed under Income Tax Act, 1961. The rate of tax at such contribution is 30% under section 115  as Voluntary Contribution.

REGISTRATION U/S 12A:

To avoid any type of Income Tax on your NGO you would have to get your NGO registered u/s 12A of Income Tax, 1961. The detail procedure is given below:

1.Fill the Form 10A which is a application form for applying for registration u/s 12A(a).

2. Documents to be enclosed: 

• Certified duplicate copies of Memorandum and By Laws of the Society or Company.
• Certified duplicate copies of document evidencing creation of trust (if first not applicable).
• Two copies of Accounts of last one/two/three years.

3. File all these document to Commissioner of Income Tax.

4. Whole procedure takes near about 3 months  (maximum 6 months) to complete, and if society seems to be genuine registration would be granted.

REGISTRATION U/S 80G:

Now coming on to the other section in Income Tax Act i.e. section 80G. This section gives deduction to the person who given donation to the NGO. Most of the people gives donation to NGO's for getting deduction from there Income so that they can save some tax. NGO have to give a receipt of donation for that. But this is not all, no person can get deduction unless the NGO is registered under section 80G. Also the registration under this section can only be applied after getting the registration under section 12A. 

To get a registration under section 80G either NGO have to file a application after getting 12A registration or they can file both the applications together. The detailed procedure is given below:

1.Fill a form under section 10G.

2.Attach the following documents:

• Copy of registration under section 12A.
• Notes on activities of last three years.
• Copy of accounts since inception or of last three years.

3. File the above documents and registration would be granted, at an average 3 months (but maximum 6 months) if the activities of societies are found to be genuine.

Author
Akshay Jain
Chartered Accountant
Varanasi (U.P.)
Contact Me at: ngoandtaxconsultant@gmail.com for any query
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