The sections 12A and 80G of the Income Tax Act, 1961, in India, are crucial for Non-Governmental Organizations (NGOs), Trusts, and other non-profit organizations. Registration under Section 12A grants exemption from income tax, while registration under Section 80G allows donors to claim deductions for their contributions to the organization.

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Understanding Section 12A

• Purpose: Section 12A provides an exemption from income tax for the income of trusts or institutions established for charitable or religious purposes. Once registered under 12A, the income of the NGO is not taxed, provided it is applied for the charitable or religious purposes for which the organization was established.

• Eligibility: Trusts, societies, Section 8 companies, and other non-profit organizations engaged in charitable or religious activities are eligible for 12A registration.

• One-Time Registration: It is generally a one-time registration, although there have been amendments in recent years requiring re-registration under Section 12AB.

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Understanding Section 80G

• Purpose: Section 80G allows donors who make contributions to certain eligible charitable organizations to claim a deduction from their taxable income. This encourages donations to the non-profit sector.

• Eligibility: Trusts, societies, universities, educational institutions, and other charitable organizations that meet specific criteria can obtain 80G registration. This registration needs to be applied for separately after or along with the 12A registration.

• Validity and Renewal: Unlike the old 12A registration, the 80G registration under the new Section 80G (introduced by the Finance Act, 2020) is granted for a specific period (initially for five years) and needs to be renewed.

New Registration Regime under Section 12AB and Amended Section 80G:

The Finance Act, 2020, brought significant changes to the registration process for charitable and religious institutions. Sections 12A and 80G have been amended, and a new Section 12AB has been inserted. The old registrations under Section 12A and 80G are no longer valid, and all existing organizations had to re-register under the new regime by a specified deadline (which has been extended multiple times).

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Registration Procedure under Section 12AB (for 12A Exemption)

The application for registration under Section 12AB is done online through Form 10A (for new registration) or Form 10A (for provisional registration or re-registration of existing organizations).

1. Access the Income Tax e-Filing Portal: Visit the official Income Tax e-filing portal: https://eportal.incometax.gov.in/iec/fos/login.

2. Login to Your Account: Log in using your PAN and password. If the organization has a separate PAN, use those credentials.

3. Navigate to Income Tax Forms: Go to the 'e-File' tab, then 'Income Tax Forms', and select 'File Income Tax Forms'.

4. Select Form 10A/10AB:

   • For New Registration (Form 10A): If the organization is newly established and has never been registered under Section 12A.

   • For Provisional Registration (Form 10A): If the organization is newly established but expects to receive approval under Section 80G. Provisional registration is valid for three years.

   • For Re-registration of Existing Organizations (Form 10A): Organizations already registered under the old Section 12A needed to apply in Form 10A within the specified time.

   • For Regular Registration after Provisional Registration (Form 10AB): After the provisional registration period or within six months of starting activities, the organization needs to apply in Form 10AB for regular registration.

   • For Renewal of 80G Registration (Form 10AB): Organizations whose 80G approval is expiring need to apply for renewal in Form 10AB.

5. Fill the Form: Provide all the necessary details in the selected form, including:

   • Basic details of the organization (name, address, PAN, registration details like trust deed/society registration number and date).

   • Details of trustees/governing body members.

   • Objectives of the organization.

   • Details of activities carried out.

   • Income and expenditure details.

   • Information about any modifications in the trust deed or rules.

6. Upload Required Documents: You will need to upload scanned copies of various documents, which may include:

   • Trust Deed/Instrument of creation or registration certificate (for societies, Section 8 companies).

   • Copies of registration certificates with relevant authorities.

   • PAN card of the organization.

   • Details of trustees/members of the governing body (including their PAN).

   • Address proof of the organization.

   • Annual reports and financial statements (if the organization has been operational).

   • Details of activities carried out.

   • For re-registration, the old 12A registration certificate.

   • For provisional registration, a self-declaration about the genuineness of activities.

7. Submit the Form with Digital Signature: The form needs to be submitted online using the Digital Signature Certificate (DSC) of the authorized signatory (e.g., trustee, secretary).

8. Acknowledgement: Upon successful submission, an acknowledgement receipt will be generated.

 

Registration Procedure for Approval under Section 80G (for Donors' Deduction)

After obtaining registration under Section 12AB (or along with the application for it), organizations need to apply for approval under Section 80G to enable their donors to claim tax deductions. This is also done online.

1. Follow Steps 1-3 as mentioned above for 12AB registration.

2. Select Form 10A/10AB:

   • For New Approval under Section 80G (Form 10A): New organizations can apply for 80G along with 12A in Form 10A.

   • For Provisional Approval under Section 80G (Form 10A): If applying for provisional 12A, you can also seek provisional 80G approval in the same form.

   • For Regular Approval after Provisional Approval (Form 10AB): After getting provisional 80G approval, apply for regular approval in Form 10AB.

   • For Renewal of 80G Approval (Form 10AB): Existing organizations with expiring 80G approval need to apply for renewal in Form 10AB.

3. Fill the Form: Provide the required details in Form 10A/10AB, specifically addressing the conditions for 80G approval. This might include details about the organization's objectives, activities, and adherence to the rules specified under Section 80G.

4. Upload Required Documents: The documents are generally similar to those for 12A/12AB registration, but you might need to provide additional information or declarations related to the conditions for 80G approval.

5. Submit the Form with Digital Signature: Submit the form online using the DSC of the authorized signatory.

6. Acknowledgement: An acknowledgement receipt will be generated.

 

Important Points for the New Regime

• Re-registration was Mandatory: All organizations registered under the old Section 12A and enjoying 80G approval had to re-register under the new Sections 12AB and the amended 80G within the stipulated time.

• Provisional Registration: Newly established organizations can obtain provisional registration under both 12AB and 80G for a period of three years.

• Regular Registration: After the provisional period or within six months of commencing activities, they need to apply for regular registration in Form 10AB.

• Renewal of 80G: The approval under Section 80G is now granted for a specific period (initially five years) and needs to be renewed. The renewal application is to be made in Form 10AB at least six months before the expiry of the approval.

• Online Process: The entire registration process is online through the Income Tax e-filing portal.

• Digital Signature: A valid Digital Signature Certificate (Class 2 or higher) is mandatory for submitting these forms online.

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Key Tips:

• Apply for both 12A and 80G together to streamline the process

• Maintain proper financial and activity records for verification

• You cannot claim 80G benefits unless 12A is granted

• Donors must receive proper receipts and your 80G details for tax deductions