Understanding 12A and 80G Registrations
Section 12A and 80G of the Income Tax Act 1961 are the twin pillars of fiscal compliance for Indian non-profit organizations:
- Section 12A: Grants 100% tax exemption on the surplus income generated by a Trust, Society, or Section 8 Company. Without 12A, the NGO is taxed under regular corporate/individual tax slabs.
- Section 80G: Empowers donors (individuals and corporations) to claim a 50% deduction on their donations against their taxable income.
Provisional vs Regular Registration
Under the revised Income Tax regime:
- Provisional 12A & 80G (₹5,000): Applied electronically via Form 10A for newly registered NGOs. It is valid for 3 years and issued on a fast-track basis without extensive historical scrutiny.
- Regular 12A & 80G (₹35,000): Applied under Form 10AB for organizations that have commenced activities. It grants a 5-year final approval following rigorous scrutiny of past accounts and charitable projects.
Required Documentation
- Self-certified copy of Trust Deed / MOA & AOA / Registration Certificate.
- PAN Card of the NGO.
- Detailed Note on past and proposed charitable activities.
- Audited Financial Statements / Balance Sheets for the last 3 financial years (for regular Form 10AB).
- Existing Provisional Approval Orders (if applying for regular renewal).
Related Filings & Annual Compliances
Holding 12A and 80G registrations mandates regular annual reporting. Non-profits must file Form 10BD Statement of Donations and submit an Audit Report in Form 10B / 10BB alongside their ITR-7 Return annually.
Frequently Asked Questions
What is provisional 12A & 80G?
It is a 3-year fast-track tax exemption certificate issued to newly incorporated NGOs before commercial audits are completed.