What is 80G Certificate?
An 80G certification is granted by the Income Tax Department to certain NGOs, which grants their donors the ability to make use of a donation tax deduction.
However, the organization must first have a 12A certificate to apply for an 80G certificate. The 80G certification may be granted only by NGOs and non-profit institutions with 12A certificates.
To receive an 80G certificate, the organization must fill in the Form 10G to include an audited statement for the last 1-3 years, or in certain cases, even from the date of establishment.
Requirements for 80G certificate
- If a non-profit organization undertakes a company, a separate account must be kept and donations should not be combined with a community.
- No cause other than a voluntary cause or its bylaws shall constitute an association. None would be spent on any gift, except for the charitable cause.
- The firm should not refer to 80G whether it advocates religion, caste, or creed-based practices.
- The society shall be registered under the Societies Registration Act, 1860.
what is form 12AA?
The aim of registering for 12AA is to get an income tax exemption. Once this registration is completed, the organization’s income cannot be taxed. The questionnaire for 12AA registration is filled out using Form 10A. Your application for registration under Section 12AA will be processed by the Commissioner of the Income Tax Department, who has authority over the organization. Both NGOs are eligible for income tax exemption, but only those who are mindful of the opportunity and are willing to take advantage of it are eligible. As a result, all NGOs, Trusts, and other Not-for-Profit organizations must be familiar with Section 12AA of the Income Tax Act to enjoy the value of the exemption cap.
Benefits of form 12AA
The fund you are intending to use for charity or faith will be known as an application for revenue. In layman's terms, the appeal for income is known as an expense borne by the trust for charitable or religious purposes.
The final revenue earned would be excluded from taxes.
The association or individual enrolled under this section can benefit from an accumulation of profits for charitable or religious purposes that can not exceed 15 percent.
The accumulation of interest is deemed to be an application of taxes under Section 11(2) and is thus not included in the total income.
NGOs benefit from the issuance of various permits from the government and other agencies. Some agencies offer financial assistance to NGOs, and these agencies prefer to give 12AA to licensed NGOs.
Registration is a one-time process carried out under Section 12AA. Once registration is completed, registration remains valid until the day on which registration is canceled. The enrollment of 12AA does not need to be renewed, so NGOs can be used as a perk.
