12A and 80G Registration
For Non-Profit Organisations (NPOs) like Trusts, Societies, and Section 8 Companies, registrations under Sections 12A and 80G of the Income Tax Act are crucial.
- 12A Registration: This is a one-time registration that exempts an NPO's income from taxation. Without it, all income, including donations, would be taxable.
- 80G Registration: This provides a benefit to donors, allowing them to claim a tax deduction for their contributions to the NPO. This is a powerful fundraising tool.
Benefits of 12A and 80G Registration:
- Tax exemption for the NPO’s income.
- Incentivizes donors and increases fundraising capacity.
- Eligibility for government grants and CSR funding.
- Enhances the organization’s credibility and transparency.
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Do You Have Any Questions?
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What is 12A (or 12AA) registration?
12A registration is a one-time registration from the Income Tax Department that exempts an NGO (Trust, Society, Section 8 Co) from paying income tax on its surplus income.
What is 80G registration?
80G registration allows donors who contribute to your NGO to claim a tax deduction on the amount they donated. This encourages more people to donate.
Are these mandatory for an NGO?
12A is essential if you want tax exemption for the NGO itself. 80G is not mandatory but highly recommended as it’s a major incentive for donors.
Can I apply for both at the same time?
Yes, you can apply for both registrations. Typically, 12A is a prerequisite for obtaining 80G registration.