In the form of a Charitable Trust/Society/Section 8 Company, an NGO (Non-Governmental Organization) is created solely to support non-profit humanitarian purposes, and once such agency is officially authorized, it is approved of a slew of tax allowances, incentives, and reliefs, as well as the provision of tax deductions for donors. Any money an NGO receives, such as service/production/donation, will be treated as regular taxable income without regard to the intent of such income until 12A and 80G registrations are obtained. NGOs with 12A and 80G certificates have a higher commercial rating than those without these certificates:

  • Only those NGOs are eligible for government funding.
  • For the duration of its life, a 12A licenced NGO may use tax-exempt revenue.
  • NGOs with an 80G Certificate accept further donations because they are required to have legitimate donation certificates (printed with an 80G identification ID) that qualify for tax exemptions.
  • The 12A registration is required in order to obtain an 80G registration. • The 12A and 80G registrations can be obtained together or separately.
  • The 12A Certificate is not available to private or family trusts.

Procedure for 12A Registration

Section 12AA of the Income Tax Act of 1961 prescribes the following method for the registration of trusts or institutions:

On receipt of an application for registration of a trust or institution, the Principal Commissioner or Commissioner shall:

  • call the trust or institution for such documents or information as he deems necessary in order to satisfy himself about
    • the genuineness of the trust or institution’s activities; and;
    • the trust or institution’s compliance with such requirements of any other law currently in force as are material for the purpose of achieving its objectives; and may also make such inquiries as he deems necessary.
  • After satisfying himself regarding the subjects of the trust or organisation, the genuineness of its operations, and complying with the conditions, he:
    • shall pass an order registering the trust or institution in writing;
    • if he is not so pleased, he shall pass an order in writing refusing to register the trust or institution, and a copy of such order shall be submitted to the claimant.

Documents required to obtain 12A Certificate

  • Form 10A;
  • Financial statements of the consecutive three years;
  • PAN card of the organization;
  • Certificate of Incorporation;
  • Trust deed, if NGO is a Trust;
  • Memorandum of Association;
  • Articles of Association of the Company.

Procedure for 80G Registration

  • Submit the Application for 80G Registration to the Commissioner of Income Tax Department in the organization’s concerned jurisdictional region.
  • Once you have submitted all of the necessary paperwork and an application, the Income Tax Department will thoroughly review them.
  • If the officials need more material, they may request additional documentation from you. You must send certain documents within the time frame specified.
  • If the department is pleased with the verification of the records and details given, the Commissioner will grant the entity 80G certification.

Documents required to obtain 80G Certificate

  • PAN card of NGO;
  • Form 10G;
  • Certificate of Incorporation;
  • Memorandum of Association
  • Trust Deed
  • Copy of utility bills (Water Bills, Electricity Bills or House Tax Receipt);
  • NOC from the property owner, if rented premises
  • List of Board of Trustees;
  • List of donors along with their PAN and their complete address;
  • A complete list of welfare activities

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