What Is an 80G Certificate?
An 80G Certificate is issued to non-governmental organisations (NGOs) such as Section 8 companies, charitable trusts, and societies by the Income Tax Department of India. It allows donors who contribute to these organisations to claim tax deductions on their donations under Section 80G of the Income Tax Act, 1961.
This provision encourages individuals and companies to support social causes by offering tax benefits on eligible donations.
When a donor makes a contribution, the NGO must issue a donation receipt containing the following details:
Name and address of the donor
Amount donated
Date of donation
Name, address, and PAN of the institution
Registration number and validity period of the 80G certificate
Donors can then use this receipt while filing income tax returns to claim the applicable deduction.
In simple terms, the 80G certificate benefits both parties — the NGO gains credibility and financial support, while donors enjoy tax exemptions for contributing to charitable activities.
About 12A Registration
12A Registration is a certification granted by the Income Tax Department of India to non-profit organisations such as NGOs, charitable trusts, and Section 8 companies. This registration allows these entities to be exempt from paying income tax on the surplus income they earn while carrying out charitable or social welfare activities.
Although NGOs and trusts operate on a non-profit basis, they may still generate income through donations, grants, or other sources. Without a valid 12A registration, such income would be taxable at regular rates under the Income Tax Act.
By obtaining a 12A certificate, the organisation gains complete tax exemption on its surplus funds, ensuring that more resources are available for its charitable objectives. This registration is generally granted once in a lifetime, unless cancelled due to non-compliance.
In essence, 12A registration serves as a legal safeguard for NGOs, protecting them from tax liabilities and strengthening their credibility while promoting transparency and accountability in their financial operations.
Benefits of Section 80G & 12A Registration
Obtaining Section 80G and 12A registration provides several financial and legal benefits for NGOs, societies, and charitable trusts. These registrations not only ensure compliance but also help in building credibility and attracting donors.
1. Tax Exemption for the NGO
An NGO registered under Section 12A is exempt from paying income tax on its surplus income. This allows the organisation to use its entire funds for charitable and developmental purposes rather than paying taxes.
2. Proof of Legal Existence
The 80G and 12A certificates serve as legal proof of the NGO’s registration and recognition by the government. These documents are essential when applying for government grants, bank loans, or CSR funding.
3. Increased Donor Confidence
Having these registrations enhances the organisation’s credibility. Donors are more likely to contribute to an NGO registered under 80G and 12A, as it reflects transparency and accountability.
4. Tax Benefits for Donors
Under Section 80G, donors can claim deductions on their taxable income for donations made to registered NGOs. This encourages more people and companies to contribute towards social causes.
5. Access to Government Support
NGOs holding 80G and 12A certifications are often given preference for government grants, financial aid, and other welfare schemes, strengthening their ability to undertake large-scale social projects.
Documents Required for 80G Registration
To obtain 80G registration under the Income Tax Act, NGOs, charitable trusts, and Section 8 companies must submit specific documents that verify their legal status, financial integrity, and charitable activities. Below is the list of essential documents required for 80G registration in India:
Trust Deed / Governing Document
For a Trust: A certified copy of the Trust Deed.
For a Society or Section 8 Company: Memorandum of Association (MoA) and Articles of Association (AoA).
Registration Certificate
A copy of the registration certificate issued under the Societies Registration Act or Companies Act, 2013 (for Section 8 Companies).
No Objection Certificate (NOC)
A NOC from the owner of the property where the NGO’s registered office is situated.
Form 10G
Duly filled and signed Form 10G, as prescribed by the Income Tax Department.
PAN Card of the NGO
A self-attested copy of the organisation’s Permanent Account Number (PAN).
Address Proof
Recent utility bill (electricity, water, or property tax receipt) of the registered office address.
Details of Donors
A list of donors including their names, addresses, and PAN numbers.
Financial Statements
Audited books of accounts, income tax returns, and supporting documents for the last three financial years.
Activity Report
A detailed report of charitable projects undertaken and progress achieved during the last three years.
Latest Business Documents (if applicable)
Relevant operational or business-related documents of the NGO, if any.
Documents Required for 12A Registration
To obtain 12A registration under the Income Tax Act, 1961, NGOs, trusts, and Section 8 companies must provide specific documents to establish their legal identity, authenticity, and charitable nature. These documents help the Income Tax Department verify eligibility for income tax exemption.
Mandatory Documents
Incorporation / Registration Certificate:
Copy of the Certificate of Incorporation (for Section 8 companies) or Registration Certificate (for trusts and societies).
Trust Deed / Memorandum of Association (MOA):
For trusts: Copy of the Trust Deed.
For societies and Section 8 companies: Copy of the MOA and Articles of Association (AOA).
Form 10A:
Duly filled Form 10A, the official application form for 12A registration.
PAN Card:
Copy of the Permanent Account Number (PAN) of the NGO, trust, or Section 8 company.
Identity and Address Proof of Key Members:
Valid ID proof (such as Aadhaar, PAN, or Passport) of the founder, trustees, or directors.
Financial Statements:
Audited financial statements or bank account statements of the past three financial years.
Activity Report:
A brief report of charitable or social activities carried out by the organisation since its inception.
Procedure for 80G Registration
To obtain 80G registration, an NGO, trust, or Section 8 company must follow a defined process with the Income Tax Department. This certification allows donors to claim tax deductions for their contributions to the organisation.
Step-by-Step Process:
Submission of Application:
The organisation must submit an application for 80G registration along with the required documents to the Commissioner of Income Tax (Exemptions) having jurisdiction over its registered area.Document Verification:
After submission, the Income Tax Department reviews all documents and details provided. Officials may conduct an on-site inspection of the NGO’s office, accounts, and activities to confirm authenticity.Additional Clarifications (if required):
If the authorities find any inconsistencies or missing details, they may ask the organisation to furnish additional documents or explanations to support its claim for tax exemption.Grant of 80G Certificate:
Once the Commissioner is satisfied with the organisation’s objectives, financial transparency, and compliance, the NGO is issued an 80G Certificate.
This certificate enables the NGO’s donors to claim deductions under Section 80G of the Income Tax Act.
Procedure for 12A Registration
To obtain 12A registration under the Income Tax Act, an NGO, trust, or Section 8 company must apply to the Commissioner of Income Tax (Exemptions). This registration provides income tax exemption on the organisation’s surplus income used for charitable purposes.
Step-by-Step Process:
Filing the Application:
The applicant must file Form 10A with the Jurisdictional Commissioner of Income Tax (Exemptions) through the official Income Tax portal.Submission of Documents:
Along with Form 10A, the organisation must submit supporting documents such as the trust deed, registration certificate, PAN, and details of charitable activities.Verification by the Commissioner:
After receiving the application, the Commissioner of Income Tax reviews the documents and verifies the genuineness of the organisation’s activities.
The commissioner may also conduct inquiries or inspections if necessary.Request for Additional Information (if required):
If any clarification or document is missing, the commissioner may request additional information or evidence from the applicant.Grant of 12A Registration:
Upon satisfaction with the organisation’s objectives and activities, the Commissioner issues a written order granting 12A registration.
This certificate provides tax exemption benefits to the NGO.Opportunity for Hearing (if Rejected):
If the commissioner is not satisfied and intends to reject the application, the organisation is given a fair opportunity to present its case before a final decision is made.