12A Registration

12A registration is a key requirement for Non-Governmental Organizations (NGOs) and charitable organizations in India. This registration allows organizations to claim tax exemptions under the Income Tax Act, 1961, by recognizing them as charitable entities. Once registered under Section 12A, the organization becomes eligible for various tax benefits, including exemption from income tax on donations received. Apnaa Filing provides professional assistance to guide you through the 12A registration process efficiently.

1. What is 12A Registration?

Section 12A of the Income Tax Act, 1961, provides tax exemptions to organizations involved in charitable or religious activities. Registration under Section 12A allows NGOs to receive tax exemptions on income derived from donations and other charitable activities. It is essential for NGOs seeking to qualify as a charitable organization to ensure that their income is exempted from tax.

2. Eligibility for 12A Registration

  • Charitable Purpose: The organization must be involved in genuine charitable activities such as education, healthcare, religious, social welfare, and other public service activities.
  • Trust or Society: The organization must be a registered Trust or Society, and the registration should reflect its charitable purpose.
  • Non-Political Activities: The NGO must not involve itself in any political activities or activities for the benefit of specific individuals.
  • Non-Profit Nature: The organization must be non-profit, meaning the profits generated must be used solely for the promotion of its charitable objectives.

3. Benefits of 12A Registration

  • Tax Exemption: Registered organizations can claim exemption from income tax on funds received through donations and other charitable activities.
  • Credibility: Being registered under 12A boosts the credibility of an NGO, making it more attractive to donors and funding agencies.
  • Eligibility for Grants: 12A registration is often a prerequisite for applying for grants and funding from government bodies and other organizations.
  • Tax Deductions for Donors: Donors can claim tax deductions on contributions made to a 12A registered organization under Section 80G of the Income Tax Act.

4. Documents Required for 12A Registration

  • PAN Card of the NGO: A valid PAN card is mandatory for the NGO.
  • Certificate of Incorporation: Proof of registration as a Trust or Society, along with the Memorandum of Association (MOA) and Articles of Association (AOA).
  • Address Proof: A utility bill (electricity, water, or gas bill) or bank statement showing the registered address of the NGO.
  • List of Trustees or Members: A list of all trustees, directors, or members of the organization.
  • Financial Records: Audited financial statements for the last two years.
  • Objective and Activity Report: A report detailing the charitable activities and objectives of the organization.
  • Income & Expenditure Details: A breakdown of the income and expenditure of the organization.

5. Step-by-Step 12A Registration Process

  1. Prepare Documents: Gather all required documents such as PAN card, incorporation certificate, address proof, and financial records.
  2. Draft the Application: Prepare and file the application for 12A registration with the Income Tax Department. The application is typically filed online.
  3. Submit the Application: Submit the application and documents to the Income Tax Department.
  4. Income Tax Department Review: The Income Tax Department will review the documents, check the organization’s eligibility, and verify its charitable activities.
  5. Approval and Certificate: Upon successful verification, the Income Tax Department will issue the 12A registration certificate, recognizing the organization as a charitable entity eligible for tax exemptions.

Key Points to Remember

  • Permanent Registration: Once granted, 12A registration is permanent unless there is a violation of the conditions or the organization’s objectives change.
  • Separate Application for 12A: A separate application must be made for 12A registration, even if the organization is already registered as a trust or society.
  • Audit Requirement: The organization must maintain proper books of accounts and undergo an annual audit.
  • Timeframe: The registration process can take 3-6 months, depending on the complexity and the review process.

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