Apply for NGO 80G Renewal/Registration under Income Tax
80G Registration
Get 80G registrations done with KarrTax- your trusted partner for tax-exempt status.
What is 80G Registration?
It is a provision (under the Income Tax Act of India) that allows donors to claim tax deductions for their donations to certain eligible charitable organizations. 80G registration encourages philanthropy and incentivizes people who contribute to charitable causes.
Simply put, when a charitable organization or trust obtains 80G registration, donations made to that organization are eligible for tax benefits. This allows donors to reduce their taxable income, resulting in tax benefits.
Benefits of 80G Registration
80G registration offers several benefits for both charitable organizations and donors. Here are the detailed pointers justifying this statement.
Benefits for Charitable Organizations:
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80G registration increases the credibility and trustworthiness of a charitable organization. It generates a sense of trust between potential donors that their contributions will be used for genuine charitable purposes.
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Charitable trusts with 80G registration receive tax-exempt donations.
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Charities can expand their reach and impact with 80G Registration as they receive greater attention and support from the media and the public.
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Having 80G Registration opens doors to potential collaborations and funding from government sources.
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80G registration requires proper record-keeping and financial transparency. This fosters good governance practices within the organization, which helps them to build trust with donors and stakeholders.
Benefits for Donors:
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Donors can claim deductions on the amount they donate to organizations with 80G registration. As a result, this encourages more people and businesses to contribute to the organization's causes.
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Businesses that are donating to organizations with 80G registration can help fulfill their CSR obligations as mandated by the Companies Act, 2013.
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Donors can easily claim deductions by providing proof of their donations, such as donation receipts issued by the registered charitable organization.
Required Documents For 80G Registration
The following documents are required for 80G registration.
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The organization's Permanent Account Number (PAN) card copy is required to establish its identity for taxation purposes.
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According to the legal structure, documents outlining the organization's objectives, governance structure, and rules are mandatory. These documents comprise a copy of the trust deed, memorandum of association (MoA), and articles of association.
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For the last three to five years, copies of audited financial statements, including balance sheets, income statements, and audit reports are required.
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A detailed description of the charitable activities undertaken by the organization is needed, along with evidence of how funds have been utilized for the same. This may include project reports, receipts, and invoices.
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To prove legal existence, the organization should include a copy of its registration certificate under the relevant law, such as the Indian Trusts Act, Societies Registration Act, or Companies Act.
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Documents or declarations demonstrating the organization's non-profit motive should be submitted.
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In case the organization receives foreign contributions, a copy of its registration under the Foreign Contribution Regulation Act (FCRA) should be included. (if applicable)
Mandatory Requirement of Darpan ID for 80G Registration
Charitable organizations seeking registration or revalidation are now required to provide details of their registration number with the Darpan portal of Niti Aayog. This significant requirement has emerged in recent years and must be followed.
Key Pointers:
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The Darpan portal is administered by the Niti Aayog (National Institution for Transforming India). It is a central platform for registering and monitoring NGOs and voluntary organizations across India.
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This mandatory requirement of providing a Darpan ID is aimed at enhancing transparency in the operations of charitable organizations.
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Darpan ID serves as a means of cross-verification to confirm the legitimacy and compliance of these organizations.
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By linking Section 80G registration to the Darpan portal, the government can take measures to prevent the misuse of tax benefits.
Eligibility For 80G Registration
Not all charitable organizations or trusts are eligible for 80G registration. To qualify, an organization must meet the below criteria.
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The organization seeking 80G registration should be legally established and registered under one of the following structures:
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A trust that has been authorized by the Indian Trusts Act of 1882.
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A society registered under the Societies Registration Act, 1860, or any relevant state-level society registration act.
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A Section 8 Company under the Companies Act, 2013, or its predecessor, Section 25 Company under the Companies Act, 1956.
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The organization must have a genuine non-profit motive. Its primary purpose should be charitable or for the public good. If any trust is found doing activities to generate profits for its members or stakeholders will get disqualified from 80G registration.
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The organization's objectives must align with the definitions and purposes specified under Section 80G of the Income Tax Act. This typically includes activities related to:
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Education,
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Medical relief,
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Poverty alleviation,
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Advancement of religion, and
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Other charitable causes.
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Charitable organizations registered under Section 80G can not participate in political activities or promote political agendas.
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To obtain 80G registration, the organization must apply to the Commissioner of Income Tax (Exemptions) or the appropriate authority. Below are the necessary required documents:
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Details of the organization's objectives,
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Financial statements,
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Audited reports, and
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Proof of its charitable activities.
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The organization must comply with all relevant charitable activity laws and regulations. This includes following the provisions of the Income Tax Act, FCRA (Foreign Contribution Regulation Act), and other relevant laws.
80G Registration Procedure
The 80G Registration process at KarrTax includes several steps to provide our clients with the best services possible.
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Step 1. Initial Assessment/ Consultation
Our tax experts start the 80G process with an initial consultation with your organization. We will discuss your organization's unique charitable activities, legal structure, and objectives. This assessment helps us gauge your eligibility for 80G registration and allows us to customize our services to your specific needs.
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Step 2. Documentation
Once eligibility is confirmed, we guide you through the document collection process. Here, our team will view and compile all the required documents and information (as discussed above) before starting the application process.
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Step 3. Filling Application Form
In this step, our team prepares the 80G registration application. We ensure that all required information is accurately included in the application form.
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Step 4. Submission and Follow-up
We will submit the completed application form with all supporting documents to the Income Tax Commissioner (Exemptions) or the appropriate authority in your jurisdiction. Further, our tax experts follow up with the authorities to track the progress of your application, ensuring that it receives the attention it deserves.
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Step 5. 80G Registration Certificate Issuance
Upon successful verification and approval of your application, you'll receive the coveted 80G registration certificate. This 80G certificate confirms your eligibility for tax-deductible donations and attracts potential donors seeking tax benefits.
It is important to remember that the specific requirements and procedures for 80G registration may evolve. So, staying updated with the latest guidelines and regulations from the Income Tax Department is always suggested. You can also seek Karr Tax professional guidance for the most accurate and current information.
Validity of 80G Registration
In India, charitable organizations enjoy certain tax exemptions and benefits under Sections 12A/12AA and 80G of the Income Tax Act 1961. However, these organizations had to undertake a crucial revalidation process for their registrations before a specified deadline.
Revalidation Requirement:
Under the Finance Act 2020, significant changes were introduced, mandating existing charitable institutions registered under Sections 12A/12AA and/or 80G to reapply for approval/registration. The primary objective was to assess the authenticity of charitable activities conducted by these entities.
New Procedure For 80G Registration (w.e.f 1st April 2021)
Under Section 12AB, a new registration procedure has been introduced, which came into effect on April 1, 2021. This change was implemented through Notification No. 19/2021, dated March 26, 2021, issued by the Central Board of Direct Taxes (CBDT).
The Notification mandates that all trusts, societies, and institutions previously registered under Section 80G must now obtain fresh registration.
Form 10A has been introduced to facilitate this new registration process, starting from the AY 2022-2023. Form 10A provides the guidelines and procedures for organizations seeking registration with the income-tax authorities to avail of the exemptions under Sections 11 and 12.
To summarize,
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The amendment in the registration process, as per Section 12AB and Notification No. 19/2021, requires entities previously registered under Section 80G to obtain new registration.
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This ensures compliance with the conditions and procedures necessary to avail of the tax exemptions provided by Sections 11 and 12 of the Income Tax Act.
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Form 10A is the prescribed form for this purpose, and these changes have been in effect since the AY 2022-2023.
Below is a table summarizing the new exemption approval process with all the relevant details!
Frequently Asked Questions (FAQs)
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What is an 80G certificate?
The Income Tax Department in India issues an 80G certificate that allows donors to claim tax deductions on donations made to eligible charitable organizations. It encourages individuals and organizations to contribute to charitable causes.
2. Who is eligible to apply for 80G registration?
Charitable organizations, including trusts, NGOs, and section 8 companies, engaged in specific eligible activities are eligible for 80G registration.
3. What are the benefits of obtaining an 80G certification for a charitable organization?
Obtaining an 80G registration allows the charitable organization to offer donors the benefit of tax deductions under Section 80G, which can encourage more donations and support for their causes.
4. Do all charitable organizations have 80G certificates?
No, not all charitable organizations have 80G certificates. Only organizations that meet certain criteria and have been approved by the Income Tax Department are eligible for this certificate.
5. How long does it take to get 80G registration approval?
The time taken for 80G registration approval can vary. It typically takes several months for the Income Tax Department to review the application and conduct necessary inspections.
6. Is 80G registration permanent, or does it require renewal?
80G registration is not permanent and usually comes with a validity period. That’s why organizations must renew their registration periodically to continue offering tax benefits to donors.
7. Can an organization with 12A registration automatically obtain 80G registration?
No, having 12A registration does not automatically grant an organization 80G registration. You must apply separately for 80G registration.
8. Can an organization receive foreign donations with 80G registration?
An organization with 80G registration can receive foreign donations but must also register under the Foreign Contribution (Regulation) Act (FCRA) to receive such donations legally.
NGOs can enjoy tax benefits by obtaining 80G registration, allowing donors to claim income tax exemptions on their contributions under Section 80G. This registration can be applied for online, and there's also a renewal application form to extend the validity of your 80G certificate. The 80G certificate is crucial for NGOs as it signifies their eligibility for tax benefits. To verify 80G registration, check with the appropriate authorities. The application process for 80G registration requires specific documents, and it's important for societies and trusts in India to secure this registration for financial support and credibility.