Who is required to get registered u/s 12A, and 80G
Registration u/s 12A- Trust, society, and section 8 companies can seek registration u/s 12A to claim an exemption under the Income Tax Act.
Registration u/s 80G- Under section 80G trust or institution can seek registration and it does not apply to religious trusts or institutions. Whereas the scheme of exemption u/s 12A applies to both charitable as well as religious trusts.
Eligibility of section 12A and 80G registration
As mentioned above religious trust or institution can not seek registration u/s 80G and if they apply, registration u/s 80G are not typically granted to them. Except for this, the following are the eligibility to get registration u/s 12A and 80G.
Section 12A- Eligibility
Following trust or institution are eligible to get registered u/s 12A
Charitable Trust, Religious Trust, Society, and section 8 company that has been formed to provide benefit to the public.
Private or family trust are not eligible to get registered itself u/s 12A.
Not all NGOs or trusts are eligible for 80G certification. There are certain rules which need to be followed to obtain it. Here are some details under which the government can reject your claim for registration or say certificate u/s 80G.
1. Separation of Business & Charity:- As a non-profit organization, if the entity is involved in any business/financial transactions which do not account for donations alone, you might have to segregate it. If not, your 80G certification request will be rejected.
2. No Misuse: The donations received so far, towards the cause should not be misused on any account or used for any other purpose, even within the organization. A strict accounting is essential to show as proof.
3. No Religious Activity: Any NGO/Trust, which is operated as a part of an activity that involves religious preaching, or for a particular caste or creed is not eligible for 80G certification.
4. Proper Accounting: As mentioned earlier, the accounting books and all transactions should be kept as proof before applying for 80G. These documents will be scrutinized thoroughly before 80G certification is issued.
Documents required for registration u/s 80G and 12A
Documents Required for 12A registration
To get the registration u/s 12A, the organization needs to submit Form 10A. This form needs to submit to the jurisdictional Principal Commissioner or Commissioner of Income Tax (exemption). Following documents to be submitted along with Form 10A-
General Documents- A copy of PAN Card, List of trustee members with there contact details, any utility bill of trust registered office, etc.
Trust Deed- Copy of Trust Deed or Instrument, where the trust is created under an instrument.
Other than Trust Deed- Copy of the document evidencing the creation of the trust, where the trust is created, otherwise than under an instrument.
Registration Copy- Copy of registration with Registrar of Companies (RoC) or Registrar of Firms and Societies or Registrar of Public Trusts.
Object Clause- Copy of the documents evidencing adoption or modification of the objects, if any;
Annual Accounts- Where the trust has been in existence for during any year or years prior to the financial year in which the application for registration is made, self-certified copies of the annual accounts of the trust relating to such prior year or years (but not more than 3 years immediately preceding the year).
Activity of Trust- Note on the activities of the trust or institution.
Scrutiny of Documents- On receipts of the application, The Principal Commissioner or Commissioner of Income Tax will scrutinize the form 10A/G and other documents submitted by the applicant. He may ask for some additional documents or any information.
Pass Order- After complete scrutiny, he may pass an order in writing registering the applicant under section 12A or 80G (as the case may be) of the Income Tax Act. If not, he may reject the application. On approval, he will issue certificate u/s 12A and/or certificate u/s 80G (as the case may be)
Time Limit- The time limit by which The Principal Commissioner or Commissioner of Income Tax has to pass an order, of either approval or rejection, shall not exceed 6 months from the end of the month in which such application was made.
Some important points relating to section 80G, 12A and 12AA
Difference between section 12A and 12AA- Both the section is related to registration of Trust, the main difference between both is that section 12A deals with registration of trust and section 12AA is deal with the procedure for registration of a trust.
Which Registration should be first u/s 80G and 12A- The application for registration u/s 12A and 80G can be applied together or they can be applied separately.
If trust is willing to apply both the registration separately, then the application for registration u/s 12A has to been applied first as the registration u/s is a must for applying for registration u/s 80G of the Income Tax Act.
Automatic Registration/Approval- It may please be noted that when registration is granted u/s 12A, it does not mean that section 80G approval has been given, It means that registration u/s 12A will not provide automatic approval u/s 80G. It has to be applied separately.
One time Registration- Section 12A is also provided that, once the registration is granted, it will hold good till the cancellation of registration.
Now the question is can we apply online for 12A and 80G registration. The answer to this question is ‘yes’.
80G Registration online- As we discussed above for 80G registration, form 10G with supporting documents need to be submitted to Jurisdictional Principal Commissioner or Commissioner of Income Tax (exemption) and for 80G registration online all the same documents need to be submitted through the Income Tax Portal. The applicant needs to submit these documents by login or registering at the portal.
12A Registration online- As per notification no. 10/2018-Income Tax issued by the CBDT as of 19.02.2018 charitable or religious trust or institution can apply for registration under section 12A. Along with form 10A, all the supporting documents need to be submitted through Income Tax Portal.
Disclaimer: The information contained in the above article are solely for informational purpose after exercising due care. However, it does not constitute professional advice or a formal recommendation. The author does not own any responsibility for any loss or damage caused to any person, directly or indirectly, for any action taken on the basis of the above article.
Feedback/Suggestion- Hope you all find it useful, please give your valuable feedback & let us know if there is an error. Thanks in Advance
I am a full-time professional Blogger & Entrepreneur. I already have many blogs on diversified topics and also manages more than 10 pages on assorted subject matters.
I have more than 5+ years of acetic and delightful experience in Blogging and writing on more than 100+ topics in English and Hindi both.
I started my blog as my dream project to help others to get knowledge with my content. I was not pro or perfect however I started imperfectly and achieved my end goals. Always remember the caption “You never lose, either you win it or learn it “
Contact us- [email protected]