80G Registration

80G Registration: Empowering NGOs with Tax Exemption

80 G Registration under Income Tax Act is a much needed registration for NGO for the purpose of exemption of Income tax. A donor who might be an individual, company, association or organization is entitled to a deduction in the total income when donating some amount to a Non Profit Organization (NGO). The exemption is under 80G of the Income Tax Act. However, the amount donated by a donor, must not exceed ten percent of gross total income of the donor.

The donations have to be made in money and the transaction of money is to be shown in this case. No other elements like bike, cycle, car or any other physical object is to be judged other than money. In case of receipts issued by donors by a nonprofit organization must have the number and date of the 80G certificate. This indicates the period till which the certificate is valid.

 

80G Registration Process for NGOs: A Step-by-Step Guide

 80G registration is a certification that allows donors to claim tax deductions on their donations to an NGO. This certification is necessary for NGOs as it incentivizes donations by offering tax benefits to the donors. The process for obtaining 80G registration has been updated to ensure better transparency and accountability.

The 80G Registration process requires a certain period. Provisional 80 G registration is granted for certain period of 3 years to new NGOs who wish to take income tax exemption registration. After 3 years NGOs can apply and get renewal of the registration of 80G certificate for next 5 years. The NGOs who want to extend the 80G registration after completion of 5 years can again apply fro renewal of the 80 G registration..

Initial Provisional Registration: NGOs can initially apply for provisional 80G registration, which is valid for three years. This provisional status allows NGOs to start offering tax benefits to their donors right away.

Documents Required for Provisional 80G Registration

• PAN Card of the NGO.
• Registration certificate and MoA in case of Section 8 companies and Societies; Trust Deed in case of a Trust.
• No objection certificate from the owner of the property where the registered office of the Institution is located.

 Process for Provisional 80G Registration

• NGOs must submit Form 10G along with the necessary documents to the Jurisdictional Principal Commissioner or Income Tax Commissioner (Exemptions).
• Upon receiving the application, the Commissioner assesses the authenticity of the NGO’s activities by verifying the submitted documents.

Gradation from Provisional to Regular 80G Registration

Before the expiry of the provisional registration, NGOs must apply for regular registration, which, if approved, is valid for five years. This involves a more detailed scrutiny of the NGO’s activities and financial transactions.

Regular 80G Registration

Documents Required for Regular 80G Registration

The documents required for the purpose is a copy of Trust Deed, Bye-laws, Registration Certificate and detail of the work upto 3 years or its inception whichever is less, copies of the audited accounts. There are few conditions that are to be fulfilled under 80 G Registration that is the NGO should not have any income which not exempted, like business income. The NGO should maintain regular accounts of expenditures and receipts. The benefit in this case is limited and the aggregate of the sums that has been donated has to be found out for the exemption, that, the donor is to receive. There is a restrain in the benefit that one can receive for the registration.

• All documents submitted for provisional registration.
• Audited financial statements for the past years.
• Activity report as the evidence of charitable activities conducted.
• Form 10G.

 Process for Regular Registration

• NGOs must fill out Form 10G and submit it along with the required documents to the Income Tax Department.
• The Income Tax Officer (ITO) may conduct a field inspection of the NGO to verify the information provided.
• If the ITO is satisfied, the NGO will be granted regular 80G registration, valid for five years.

 Benefits of 80G Registration for NGO

Registration under 80G enhances an NGO’s ability to attract donations by offering tax deductions to donors. Chanakya NGO Consultancy’s expertise ensures that NGOs can navigate the registration process efficiently, allowing them to focus on their core mission while providing tax benefits to their supporters. Donations received by the NGO are also exempt from taxation in the hands of the donor under Section 80G. Registered NGOs are more attractive to potential donors because donations made to them are eligible for tax deductions under Section 80G. This encourages individuals and organizations to contribute to the NGO’s cause

For NGOs seeking to obtain or renew their 80G registration, partnering with Chanakya NGO Consultancy can be a strategic move to ensure success. Chanakya NGO Consultancy provides documentation consultancy for Income Tax exemption registration process to get Section 80 G registration certificate under Income Tax Act.

Eligibility Criteria for 80G Registration Certification

• Legal Structure: The organisation must be registered under an appropriate legal structure recognized by the concerned Government authority, such as a Trust, Society, or Non-profit Section 8 company.
• Non-profit Nature: The primary objective of the social organisation should be promoting charitable activities rather than generating profits. The funds can only be used for the benefit of people and society not an individual or the members of NGO.
• Compliance with Statutory Requirements: The organisation must comply with all the requirements under sections 11 and 12 of the Income Tax Act.
• Proper Documentation: The Non-profit organisation must maintain regular accounts of receipts & expenditures.
• Audit Reports: NGO’s accounts must be audited by a chartered accountant if the total income exceeds the minimum threshold prescribed under the Act
• Utilization of Funds: At least 85% of the income should be spent on the objectives of the organization within India.
• No Discrimination: The Non-Governmental Organisation should not use its resources for the benefit of any particular religious community or caste. This rule is not applicable for the minority communities.
• Public Charitable Activities: The social welfare organisation must be engaged in public charitable, social welfare and social development programmes and activities like relief of the poor, education, yoga, medical relief, environment conservation, women development, child development, welfare of old aged persons, person with a disability, animal welfare.

Documentation and Process by NGO Consultancy

Chanakya NGO Consultancy provides comprehensive consulting services to assist NGOs in obtaining 80G registration. They guide NGOs through the entire process, from preparing the application to ensuring compliance with all legal requirements.

Services Provided by Chanakya NGO Consultancy

• Guidance on completing Form 10Gand compiling the necessary documentation.
• Assistance with the submission of the application to the appropriate authorities.
• Support during the inspection process and in responding to any queries from the Income Tax Department.
• Expert advice on maintaining the 80G registration and complying with the renewal process.

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