An NGO ( Society/Section 8 Company/ Trust ) can obtain registration under 12A so that no tax is levied on the Surplus Income of NGO and 80G registration can be obtained so that Donner can claim tax exemption up to 50% of amount donated subject to maximum 10% of Gross Total Income of Donner.
What is 12A Registration of NGO
Once NGO has obtained 12A registration, NGO gets Tax Benefits that the Surplus Income of NGO becomes non taxable.
What is 80G Registration of NGO
An Institution having 80G Registration provides tax benefits to donor up to 50% of donation made to such institution, subject to maximum 10% of Gross Total Income of Donor
Procedure for Registration under Section 12AA and 80G:
- The Application is required to be made in form 10A and 80G
- The Application is required to filed with Correct Information as regard to Institution , Such as Name , Address and KMP, Date of Incorporation
- Details of Author(s)/Founder(s), like PAN , Name , Address
- Details of Trustees/Office Bearers/Directors as on the date of filing of application
- Objects of Institution such as Relief to poor , Medical , Education etc
- The Application should be accompanied with
- Annual Accounts of Last Three Year or Accounts from the Date of Incorporation or Formation Certificate of Incorporation, Registration or Trust Deed Note on Activities of Institution
Once the Application is Submitted, the Income Tax Department Exemption ward will issue questionnaire asking for some more documents and
Sample Questionnaire :
1 A declaration that no part of the income of the Trust/ Society/ Non Profit Company enures, directly or indirectly for the benefit of any person specified in section 13(1)(c) of the Income Tax Act, 1961 and that no part of the income or property of the Trust/ Society/Company was ever used or applied for the benefit of any person specified in section 13(1)(c) of the Income Tax Act, 1961, duly signed by the Authorized Signatory.
2 A note specifying the main area of your charitable/ religious activities and a projection/ plan for the main charitable/ religious activities to be undertaken in the next two years.
3 Please attach a ‘No Objection Certificate’ from the owner of the premises from which you are operating along with proof of his ownership.
4 Please attach a certified copy of annual accounts since inception/ during last three years.
5 Please attach a certified copy of the Trust Deed/ Memorandum of Assosiation and produce original copy for verification.
6 Please attach a copy of the proof of identity of the main Trustee/ President or Secretary of the Trust/ Society/ Non Profit Company.
7 Please attach a note on activities conducted since inception/ during last three years.
8 Please attach details of donations made since inception/ during last three years.
9 Please attach details of donations received, including corpus donation, received since inception/ during last three years.
10 Please attach details of your bank accounts including name of the bank, branch, type of account and number of account
11 Please file an undertaking that there will be no infringement to the 1st proviso to section 2(15) of the Income Tax Act, 1961.
12 Please specify the category of charitable purposes provided in section 2(15) of theIncome-Tax Act, 1961 in which your case falls, i.e., whether your objective is relief ofthe poor/ education/ yoga/ medical relief/ preservation of environment (includingwatersheds, forests and wildlife)/ preservation of monuments or places of artistic/historic interest/ advancement of any other object of general public utility/ religiousactivities.
13 Your Trust Deed/ Memorandum of Association does not have Irrevocability Clause.Please include this clause in your Trust Deed/ Memorandum of Association and file acertified copy of the amended Trust Deed/ Memorandum of Association.
14 Your Trust Deed/ Memorandum of Association does not have a clause that thebeneficiaries are a section of the public and not specific individuals. Please includethis clause in your Trust Deed/ Memorandum of Association and file a certified copyof the amended Trust Deed/ Memorandum of Association.
15 Your Trust Deed/ Memorandum of Association does not have any clause providingthat in the event of dissolution of Trust/ Society/ Non Profit Company,the funds/assets of the Trust/ Society/ Non Profit Company will be transferred only to someother Trust/ Society/ Non Profit Company having similar objectives. Please includethis clause in your Trust Deed/ Memorandum of Association and file a certified copyof the amended Trust Deed/ Memorandum of Association.
16 Your Trust Deed/ Memorandum of Association does not have any clause providingthat the funds/ property of the trust will be used only for the objectives of theTrust/Society/ Non Profit Company. Please include this clause in your TrustDeed/Memorandum of Assosiation and file a certified copy of the amended TrustDeed/Memorandum of Assosiation.
17. If the Trust Deed/ MOA etc. are in vernacular language, please furnish certified translatedcopy of entire Trust Deed/ MOA in English/ Hindi.
18. Photocopy of PAN card(s) of the organisation along with the original PAN card forverification.
19. Copies of Income Tax Returns filed for last three years along with computation and AuditReport in Form No. 10B.
20. If represented through authorized representative, duly discharged letter of authorityalongwith name, address, mobile no. and e-mail address may be furnished.
21. Details of charitable or religious activities actually carried out by the organisation since its inception. In case no such activities have been carried out in any of earlier financial years, please furnish such details for the current financial year till date along with the documentary evidence
22. In case of schools/ hospitals, whether necessary the permission from the State Govt./ Local bodies has been obtained? File a copy of same.
23. In the case of any change in trustee/ member/ principal officer/ address of the organisation, copy of relevant change report from Charity Commissioner/ Registrar of Companies may be filed.
24. If any donation from foreign country is received then submit the details of registration under FCRA alongwith donation received and purpose thereof.
25. Please furnish online Acknowledgement receipt of Form No. 10G/ If applied
A hearing is required to be attended for submitting the documents and information as per questionnaire.
Once the CIT, Exemption is satisfied about the Grant of Registration under Section 12A and 80G , he may grant the Registration or call for more such information to the satisfaction of CIT.