Section 12AB and Section 80G Registration

Section 12AB and Section 80G are provisions under the Income Tax Act that provide tax exemptions to NGOs and charitable organizations. These registrations are essential for the financial sustainability of non-profit entities working for social causes.

What is Section 12AB Registration?

Section 12AB is an amendment introduced by the Ministry of Finance relating to the compliance and registration process of religious or charitable trusts and institutions. Organizations registered under this section are exempted from paying income tax on their surplus income.

Key Benefits of Section 12AB Registration

• Tax Exemption on NGO Income
• Eligibility for Government Grants
• Enhanced Credibility and Trust
• Access to CSR Funding
• Eligibility for FCRA Registration
• Recognition as a Legitimate Non-Profit Entity

What is Section 80G Registration?

Section 80G registration allows donors to claim tax deductions on donations made to registered NGOs and charitable organizations. This encourages more individuals and corporations to donate, increasing the fundraising capacity of non-profit organizations.

Documents Required for Section 12AB and 80G Registration

• Trust Deed/MOA & AOA of the Organization
• Registration Certificate of Trust/Society/Section 8 Company
• PAN Card of the Organization
• ID Proofs of Trustees/Directors
• Bank Account Statements
• Audit Reports (if applicable)

Registration Process for Section 12AB and 80G

The registration process involves these key steps:

Who Should Apply for Section 12AB and 80G Registration?

• Non-Governmental Organizations (NGOs)
• Charitable Trusts
• Section 8 Companies
• Societies Registered under Societies Registration Act
• Educational Institutions
• Healthcare Organizations
• Religious Organizations with Charitable Activities
• Social Welfare Organizations
• Environmental Conservation Groups
• Animal Welfare Organizations

Conclusion

Section 12AB and Section 80G registrations are vital for NGOs and charitable organizations to achieve financial sustainability. Section 12AB provides tax exemption on the organization's income, while Section 80G encourages donations by offering tax benefits to donors. These registrations enhance credibility and open doors to various funding opportunities.