12A and 80G Registration

DEFINITION

12A registration is granted by the Income Tax Department to non-profit organizations, such as trusts, societies, and Section 8 companies. This registration allows them to be recognized as tax-exempt entities, meaning their income is not subject to income tax.

80G registration allows donors to claim tax deductions on donations made to an NGO. This makes it attractive for individuals and corporate donors to contribute to registered non-profits.

BENEFITS OF 12A REGISTRATION

  • Tax Exemption: The organization's income is exempt from income tax.
  • Eligibility for Grants: Organizations with 12A registration can apply for government and private sector grants.
  • Increased Credibility: It enhances the trustworthiness of the NGO in the eyes of donors and funding agencies.
  • Lifetime Validity: Once registered, 12A status remains valid unless cancelled by the Income Tax Department.

BENEFITS OF 80G REGISTRATION

  • Tax Benefits for Donors: Donors can avail of tax deductions (50% or 100%, depending on the category of the NGO) under Section 80G of the Income Tax Act.
  • Encourages Donations: More donors are willing to contribute as they get tax benefits.
  • Corporate Funding: Many corporate donors prefer NGOs with 80G registration for CSR (Corporate Social Responsibility) purposes.
  • Enhanced Credibility: It boosts the reputation of the NGO, making it easier to secure funding.
 
     
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