For NGOs, Trusts, Societies, and Section 8 Companies, obtaining 12A and 80G Registration is crucial to ensure tax exemptions and attract donations. 12A Registration exempts an NGO’s income from income tax, while 80G Registration allows donors to claim tax deductions on their contributions.

1. What is 12A and 80G Registration?

12A Registration Meaning & Benefits

•12A Registration exempts NGOs, Trusts, and Societies from paying income tax.

•It allows NGOs to use their entire income for charitable purposes without tax deductions.

80G Registration Meaning & Benefits

•80G Registration provides tax benefits to donors, encouraging more donations.

•Donations to 80G registered NGOs are eligible for 50% tax exemption.

Who Needs 12A and 80G Registration?

•Trusts & Societies under the Indian Trusts Act, 1882 or Societies Registration Act, 1860

•Section 8 Companies under the Companies Act, 2013

•NGOs that seek CSR funding and foreign donations (FCRA)

2. Benefits of 12A and 80G Registration

•Tax Exemption: NGOs don’t have to pay income tax.

•Encourages Donations: Donors get tax deductions under 80G Registration.

•Essential for CSR Funds: Companies prefer donating to 12A & 80G registered NGOs.

•Better Fundraising: Helps attract domestic & international donors.

3. 12A and 80G Registration Process Online

The Income Tax Department processes 12A 80G Registration applications through the Income Tax e-Filing Portal.

Step 1: Register on the Income Tax Portal

•Visit the Income Tax e-Filing Portal.

•Create an account using the NGO’s PAN.

•Select "Application for Registration" under Form 10A.

Step 2: Submit Required Documents

•NGO’s PAN Card

•Registration Certificate (Trust Deed/Society Registration/Section 8 License)

•MOA & AOA (for Section 8 Companies)

•Annual Financial Reports (if available)

•Details of Key Members

Step 3: Verification & Approval

•The Income Tax Department reviews the documents.

•Approval is granted within 1-2 months.

Validity: 12A Registration is permanent, while 80G Registration requires renewal every 5 years.

4. 12A and 80G Registration Fees & Processing Time

•Government Fee: ₹0 (No official fee)

•Professional Fees: ₹5,000 – ₹25,000 (if hiring consultants)

•Processing Time: 30-60 days

5. Section 8 Company Registration & Its Link to 12A & 80G

A Section 8 Company is a non-profit entity under the Companies Act, 2013, focused on charitable activities. To receive tax benefits and donations, a Section 8 company must obtain 12A and 80G Registration.

Section 8 Company Registration Process

•Apply for Digital Signature Certificate (DSC)

•Obtain Director Identification Number (DIN)

•Reserve Company Name (RUN Form on MCA Portal)

•Draft MOA & AOA (Memorandum & Articles of Association)

•Apply for Section 8 License (INC-12 Form)

•File Incorporation Form (SPICe+ Form)

Time Required: 30-45 days

Cost: ₹10,000 – ₹50,000

6. CSR-1 Registration for CSR Funding

What is CSR?

•CSR Full Form: Corporate Social Responsibility

•Companies earning over ₹5 crore profit must donate 2% of profits to social causes.

CSR-1 Registration Process

•Complete NITI Aayog Registration

•Apply for CSR-1 Registration on MCA Portal

•Submit MOA, AOA & PAN Details

Why is CSR-1 Registration Important?

•Mandatory for receiving CSR funds from corporates.

•Enables NGOs to participate in CSR activities.

7. FCRA Registration for Foreign Donations

What is FCRA?

•FCRA Full Form: Foreign Contribution (Regulation) Act

•FCRA Registration is mandatory for NGOs accepting foreign contributions.

FCRA Registration Process

Apply via FCRA Online Services

Submit:

•NGO Registration Certificate

•Audit Reports

•Trust Deed or MOA

Approval from Ministry of Home Affairs (MHA)

FCRA Renewal Status: FCRA is valid for 5 years and requires timely renewal.

8. Challenges in 12A & 80G Registration & Solutions

•Complex Documentation: Hire professionals for proper guidance.

•Long Approval Time: Submit accurate and complete documents.

•Frequent Renewals for 80G: Keep financial records updated.

Conclusion

Obtaining 12A and 80G Registration is essential for Trusts, Societies, and Section 8 Company Registration to secure tax exemptions and attract more donors and CSR funds. 12A Registration exempts NGOs from paying income tax, while 80G Registration allows donors to claim tax deductions, making it easier to raise funds.

Additionally, CSR-1 Registration is mandatory to receive CSR funding, and NGOs seeking foreign donations must obtain FCRA Registration. By completing the 12A and 80G Registration process online, organizations can ensure compliance and maximize their impact.

FAQs

1. Who is eligible for 12A and 80G Registration?

Ans. Any Trust, Society, or Section 8 Company engaged in charitable, religious, educational, or social welfare activities can apply for 12A and 80G Registration to receive tax exemptions and donor benefits.

2. How long does it take to complete 12A and 80G Registration?

Ans. The registration process takes 1-2 months, depending on document verification and approval by the Income Tax Department.

3. Can an NGO apply for CSR funding without 12A and 80G Registration?

Ans. No, NGOs must have 12A and 80G Registration and CSR-1 Registration to be eligible for CSR funds from corporate companies.

4. Is there a government fee for 12A and 80G Registration?

Ans. No, the government fee is ₹0, but NGOs may incur professional consultancy fees ranging from ₹5,000 – ₹25,000 for assistance with documentation and application.

5. Can an NGO receive foreign donations with only 12A and 80G Registration?

Ans. No, to receive foreign donations, an NGO must also obtain FCRA Registration under the FCRA Act 2010. 12A and 80G Registration only apply to domestic tax exemptions and donations.