12A registration to get Income Tax Rebate
12A registration under the Income Tax Act serves as a cornerstone of financial support for NGOs in India. It grants tax exemption to registered NGOs, enabling them to allocate more resources towards their charitable activities. The registration process is currently governed by Section 12AB, which provides a systematic framework for applications
Provisional 12A Registration
A Stepping Stone
Newly established NGOs or the NGOs not have registration under 12A can apply for provisional registration, which is valid for three years. This provisional status allows NGOs to operate within the legal framework from the beginning, ensuring their compliance and eligibility for tax benefits.
Documents Required for Provisional 12A Registration
- NGO’s registration certificate.
- Memorandum of Association/Trust Deed.
- PAN card of the NGO.
- Proof of the registered office’s address.
- Details of the governing body members.
- Financial documents, if any, since inception.
Process for Provisional Registration
- Submission of Form 10Ato the Jurisdictional Commissioner of Income Tax (Exemptions).
- Inclusion of all necessary documents with the application.
- Grant of provisional registration upon satisfactory review.
Transitioning to Regular 12A Registration
As the provisional period nears its end, NGOs must apply for regular registration to continue enjoying tax exemption. This regular registration is valid for five years and requires a thorough examination of the NGO’s activities and finances.
Documents Required for Regular 12A Registration
- Documents from provisional registration.
- Activity report of the NGO for the duration of its operation or the last three years.
- Audited financial statements for the past three years.
- Proof of charitable activities conducted.
Process for Regular 12A Registration
- Filing of Form 10ABat least six months before the provisional registration expires.
- Submission of a detailed activity report and audited financial statements.
- Assessment by the Commissioner and grant of regular registration for five years.
Eligibility Criteria for 12A Certification
- Registration Requirements: The organisation must be formally registered under a recognised legal framework, such as a Trust, Society, or Section 8 Non-profit Company, as mandated by Government regulations.
- Non-Profit Objectives: The core mission of the social organisation should focus on charitable pursuits aimed at public welfare, rather than personal profit of any member. All funds should be directed solely towards societal benefits.
- Statutory Compliance: The organisation is required to fulfill all stipulated conditions under sections 11 and 12 of the Income Tax Act, ensuring full legal compliance.
- Financial Documentation: It is imperative for the organisation to keep accurate and up-to-date financial records documenting all transactions.
- Financial Auditing: Should the organisation’s total income surpass the stipulated threshold, its financial accounts must be audited by a certified chartered accountant.
- Resource Allocation: A minimum of 85% of the organization’s income must be expended on its primary objectives within India to qualify for this certification.
- Inclusivity: The organisation must operate without bias towards any specific religious group or caste, although this condition does not apply to services aimed at minority communities.
- Charitable Spending: A substantial portion of the organisation’s income must be allocated to carrying out charitable activities within India.
- Equity in Allocation: There should be no distribution of income or assets for the personal benefit of its founders, trustees, members, directors or any key individuals those are relatives of the members of the organisation.
Registration certification under 12 A not only facilitate tax relief for the organisations themselves. Following these criteria is necessary for NGOs to leverage these benefits and remain compliant with prevailing tax regulations.
Chanakya NGO Consultancy: Navigating the Path to Registration
Chanakya NGO Consultancy is a seasoned guide in the realm of NGO compliance and growth. They specialize in assisting NGOs through the intricate process of 12A registration, ensuring that every legal requirement is met with precision.
Comprehensive Consultancy Services:
- Detailed guidance on completing Form 10Aand Form 10AB.
- Assistance with the preparation of all required documentation.
- Expert advice on maintaining compliance with the Income Tax Act.
- Support in compiling activity reports and financial statements.
Consultancy Service is Stands Out for:
- Expertise: Profound knowledge of the legalities involved in 12A registration.
- Experience: A rich history of aiding NGOs in successful tax exemption applications.
- Support: Unwavering assistance throughout the registration journey and beyond.
The 12A registration process is a important step for NGOs to achieve financial efficiency and credibility. After getting it your NGO will be free from tax on the income as donation during filing the Income Tax returns.Chanakya NGO Consultancy offers a partnership that simplifies this complex process, enabling NGOs to focus on their core mission while ensuring compliance and financial health. For a detailed understanding of the 12A registration process and to avail of Chanakya’s expert services, NGOs are welcome to contact. Chanakya team supports the eligible NGO and provide consultancy that work would be processed. Our consultants will also help you in any other regard that is related to the 12A registration of NGO.