How to Apply for 12a and 80g

Quick Summary

Registration under Section 80G provides Income Tax benefits to the donor of the NGO. In contrast, registration under Section 12A is for exemption of income tax for NGOs such as societies, trusts, and Section 8 Companies. The application or revalidation process for both 12A/80G registration is done through the Income Tax Department’s E-filing portal. NGOs fill in Form 10A with the required details and attachments, then submit it using Electronic Verification Code (EVC) or Digital Signature Certificate (DSC). This online process streamlines compliance and reporting obligations for NGOs using the latest procedural guidelines.

Overview

Section 11 of the Income Tax Act, 1961 states that "If your money is used purely for charitable or religious purposes, you don’t have to pay tax on it.”

Obtaining Section 12A and 80G registrations under the Income Tax Act can be a transformative step for charitable organisations and NGOs. These registrations not only signify official recognition from the Income Tax Department but also open doors to several advantages that add value to the organisation’s mission. Section 12A registration ensures that your NGO's income from donations and charitable activities is exempt from income tax, while Section 80G registration allows your donors to claim tax deductions on donations made to your organization. Both certificates build your NGO’s credibility and greatly enhance funding potential.

This blog will guide you with the importance of 12A and 80G Registration and how to apply for the same.

Understanding 12A and 80G Registration 

If you run or plan to start an NGO in India, 12A registration and 80G registration are special provisions under the Income Tax Act that can help both your organization and your donors save money on taxes.

Here’s how it works together:

• With a 12A registration, your NGO doesn’t pay income tax on donations used for charitable purposes.
• With 80G registration, your NGO and your donors can get tax benefits for the money they donate.

How to apply for 12A Registration

If you want your NGO to be spared from paying income tax on donations and charitable income, getting 12A registration is the first important step. Here’s how to apply for it easily:

Step 1: Confirm Your NGO’s Legal Status

Make sure your organization is registered as a Trust, Society, or Section 8 Company and has a PAN card in its name.

Step 2: Gather the Necessary Documents

Prepare your registration certificate, PAN card, list of trustees/directors with ID proofs, financial statements (audited if available), bank account details, and a report describing your charitable activities.

Step 3: Apply Online via Income Tax Portal

• Go to the Income Tax Department’s official NGO registration portal.
• Fill in the 12A registration application form with the correct NGO details.
• Upload scanned copies of your documents.
• Provide a clear description of how you use funds for charity.
• Submit your application and save the acknowledgment number.
  
  

Step 4: Follow Up

The Income Tax Department usually takes 3 to 7 days to review your application. Be ready to provide any additional info if asked.

Step 5: Keep Your Records Ready

Maintain all originals and copies of submitted documents safely for future reference.

Once approved, your NGO will not be taxed on eligible income, making this an essential certification for every nonprofit

How to Apply for 80G Registration: A Simple Step-by-Step Guide

After getting your 12A registration, the next step is 80G registration. This lets your donors claim tax deductions for donations made to your NGO, encouraging more support.

Step 1: Ensure You Have 12A Registration

80G can only be applied for after your NGO has obtained 12A certification.

Step 2: Collect All Required Documents

Have on hand your 12A registration certificate, audited financial statements, utilization certificates showing funds spent on charity, bank details, and reports on your NGO’s activities.

Step 3: Apply Online on the Income Tax Portal

• Log in to the same Income Tax NGO portal used for 12A.
• Fill out the 80G application form carefully with your NGO’s financial and donation details.
• Upload your 12A certificate and all supporting documents.
• Submit and note the acknowledgement receipt.
  
  

Step 4: Track Your Application

Applications usually take a few months for approval. Be prepared to respond if the Income Tax Department requests further clarification.

Step 5: Use Your 80G Certificate

Once granted, display the 80G certificate prominently. Donors can now claim tax deductions for their contributions, helping your NGO attract more funds.

Common reasons for 80G application rejections 

If you are concerned about your accurate application and smooth registration process without minimising the risk of cancellation, you need to follow these common reasons outlined below:

1. Incomplete Documentation: Missing essential documents like MOA, AOA, trust deed, PAN, or audited financial reports leads to automatic rejection.
2. Mismatched Information: Discrepancies in details across PAN, registration certificate, and application form can trigger rejection.
3. Lack of Financial Records: Absence of 1-3 years of audited financial statements undermines compliance credibility.
4. Poorly Defined Objectives: If the MOA or trust deed does not clearly state charitable purposes, the application can be denied.
5. Invalid or Outdated Registration Certificates: Old or improperly signed certificates raise red flags.
6. PAN Mismatch: PAN card details of the NGO and authorized signatory must match the submitted data.
7. Missing Digital Signature Certificate (DSC): Absence of a valid DSC or e-verification can cause submission failure.
8. Duplicate Applications: Filing multiple applications without withdrawal leads to disqualification.
9. Financial Non-Compliance: Lack of proper accounting or audited accounts reduces trust.
10. Failure to Update Changes: Not updating details like trustees or objectives with authorities causes confusion and rejection.

Validity of 12A and 80G Certificates 

When your NGO gets 12A and 80G registrations for the first time, these approvals are provisional and valid for 3 years only.

Before this 3-year period ends, you’ll need to apply to renew the certificates to keep enjoying the tax benefits. You should apply for renewal either:

• 6 months before the certificates expire, or
• Within 6 months of starting your NGO’s activities, whichever comes first.

After renewal, the certificates are valid for a longer period of 5 years at a time.

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FAQs

1. What is 80G Registration?
80G registration allows donors to claim a tax deduction on donations made to an NGO. NGOs with 80G certification can attract more donations, as donors get up to 50% or 100% income tax deductions depending on the NGO category.

2. How do NGOs apply for 80G Registration?
NGOs must apply online through the Income Tax Department’s official portal by submitting Form 10G along with required documents like registration certificate, audited financials, and details of charitable activities. The application is reviewed, and provisional registration is granted initially for 3 years.

3. Can 12A and 80G registrations be applied together?
Yes, NGOs can apply simultaneously or separately. However, 12A registration (income tax exemption for the NGO) is mandatory before applying for 80G.

4. What is the validity of 80G Registration?
New 80G registrations are valid for 3 years initially, and upon renewal, are valid for 5 years each time. NGOs must apply for renewal on time to maintain benefits.

5. What documents are required for 80G Registration?
Key documents include the Trust Deed or MOA, registration proof, PAN card, audited accounts, bank statements, and evidence of charitable activities.