Income of an organization is exempted if NGO has 12-A registration. This is one time registration.
If an organization has obtained certification under section 80-G of Income Tax Act then donors of that NGO can claim exemption from Income Tax. Earlier it was not one time registration and trust were required to get 80G Certificate renewed after validity period.
But As per Circular 7/2010 dated 27.10.2010 issued by the CBDT, all Trusts enjoying exemption u/s 80G as on 1.10.2009 and other Trusts obtaining 80G certificate after 1.10.2009 shall continue to hold and enjoy the same for perpetuity unless revoked by the Income Tax Authorities.
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Application for registration under section 12A and 80G can be applied just after registration of the NGO.
Application for registration under section 12A and 80G can be applied to the Commissioner of Income Tax (Exemption) having jurisdiction over the institution.
Yes, Both applications can be applied together or it can be also applied separately. If some organization is willing to apply both applications separately, then application for registration u/s 12A will be applied first. Getting 12A registration must for applying application for registration u/s 80G of Income Tax Act.
If application for registration under section 12A and 80G will be applied through NGO factory, it should take 3-4 months.
For 12A registration: Form 10A
For 80G registration : Form 10G
( For New Application and renewal both).
For 12A registration: Lifetime validity
For 80G registration : 1 to 3 years validity
There are few conditions on section 80G:
Only donations in cash/cheque are eligible for the tax deduction:-Donations in kind do not entitle for any tax benefits. For example, during natural disasters such as floods, earthquake, and many organisations start campaigns for collecting clothes, blankets, food etc. Such donations will not fetch you any tax benefits. No deduction under this section is allowable in case of amount of donation if exceeds Rs 10000/- unless the amount is paid by any mode other than cash.
Donation made by NRI: NRIs are also entitled to claim tax benefits against donations, subject to the donations being made to eligible institutions and funds.
Deduction if donation deducted from Salary and donation receipt certificate is on the name of employer: Employees can claim deduction u/s 80G provided a certificate from the Employer is received in which employer states the fact that The Contribution was made out from employee’s salary account.
Limit on donation amount: There is no upper limit on the amount of donation. However in some cases there is a cap on the eligible amount i.e. a maximum of 10% of the gross total income.
Deduction amount U/s. 80G: Donations paid to specified institutions qualify for tax deduction under section 80G but is subject to certain ceiling limits. Based on limits, we can broadly divide all eligible donations under section 80G into four categories.
List of Institution donation to whom is eligible to 100% deduction without any qualifying limit, eligible to 50% deduction without any qualifying limit, 100% & Subject to qualifying limit and of those eligible for 50% deduction subject to qualifying limit are as follows:
Donations with 100% deduction without any qualifying limit:
Donations with 50% deduction without any qualifying limit:
Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income:
Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income:
There are thousands of trusts registered in India that claim to be engaged in charitable activities. Many of them are genuine but some are untrue. In order that only genuine trusts get the tax benefits, the Government has made it compulsory for all charitable trusts to register themselves with the Income Tax Department. And for this purpose the Government has made two types of registrations necessary u/s. 12A & U/s. 80G. Only if the trust follows the registration U/s. 12A, they will get the tax exemption certificate, which is popularly known as 80G certificate. The government periodically releases a list of approved charitable institutions and funds that are eligible to receive donations that qualify for deduction. The list includes trusts, societies and corporate bodies incorporated under Section 8 of the Companies Act 2013 as non-profit companies.
Charitable organization is more than 10 % of the Gross Total amount income calculated under the Act (as lowered by earnings on which income tax is not payable under any arrangement of this Act and by any quantity in respect of which the assessee is entitled to a reduction under any other arrangement of this Chapter), then the quantity in excess of 10 % of Gross Total Earnings shall not get deduction under section 80G. While computing the overall income of an assessee and for arriving at the deductible quantity under section 80G, first the aggregate of the sums donated needs to be discovered. 50 per cent of such contributions has actually to be found out and it must be limited to 10 per cent of the gross total income.
The unwanted will have to be ignored if such quantity is even more than 10 per cent of the gross overall earnings. The persons or company who donate under section 80G gets a deduction of 50 % from their taxable income. Below at times a confusion creeps in, that the tax advantage under section 80G is 50 %, but in fact it is not so. 50 % of the donation made is allowed to be deducted from the gross income and consequently tax is determined .
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