12A Registration & Tax Benefit

 If you are a non-profit organization looking to claim exemption from income tax and receive donations from donors who can claim tax benefits under Section 80G of the Income Tax Act, then you should consider applying for 12A Registration. The process for obtaining 12A Registration involves submitting the required documents, including Form 10A, to the Income Tax Department. Once the application has been submitted, the Commissioner may request the applicant to submit additional information or documents as needed. The benefits of 12A Registration include exemption from paying income tax, eligibility for government funding, and the ability for donors to claim tax benefits. To apply for 12A Registration, you should consult with a qualified professional Don’t miss out on the benefits of 12A Registration – apply today!

 

What is 12A Registration?

 12A Registration is a registration granted by the Income Tax Department to trusts and other non-profit organizations. The primary objective of this registration is to obtain an exemption from income tax payment. It is generally applied for immediately after the organization’s incorporation. Non-profit entities such as Section 8 Companies, Trusts, and NGOs that have obtained 12A Registration are entitled to income tax exemption on their surplus income.  The registration is not applicable for private or family trusts, and the activities of the organization should be genuinely for the benefit of the public. Once registered, the organization can enjoy the advantages and privileges provided under Section 12A of the Income Tax Act, including eligibility for government funding and the ability for donors to claim tax benefits.  The process for obtaining 12A Registration typically takes 15-30 day.

 

Eligibility for 12A Registration

The eligibility for 12A Registration under the Income Tax Act is as follows:

• Entities Eligible for 12A Registration: Charitable Trusts, Religious Trusts, Societies, and companies that come under Section 8 are eligible for 12A registration.
• Ineligibility: Private or Family Trusts are not eligible for 12A Registration.
• Activities: The activities of the organization should be genuinely for the benefit of the public

Documents required for 12A Registration

12A Registration is a one-time registration granted by the Income Tax Department to trusts and other non-profit organizations. To obtain 12A Registration, the organization needs to submit the following documents:

1. Registration Certificate of Trust/ Society/Section 8 Company
2. Memorandum of Association (MoA)/ Trust Deed
3. PAN Card of Trust/ Society/ Section 8 Company
4. Members/ Directors/ Trustees and authors Documents – Passport Size Photograph, PAN Card, Adhaar Card, Email ID and Mobile Number
5. Business Address Proof: Provide proof of your organization’s business address.
6. 12A & 80G Registration Provisional Certificate ( Self Attested Copy)
7. Society/ Trust/ Section 8 Email ID and Office Address
8. Previous 3 year Audit Report in case of old NGO

 

Procedure for Obtaining 12A Registration

The procedure for obtaining 12A Registration involves the following steps:

Step 1  Application Submission:

The assessee is required to submit the application in the required format online using Form 10A.

Step 2 Verification and Additional Information:

After the application has been submitted, the Commissioner may request the applicant to submit additional information or documents as needed to ensure the genuineness of the activities undertaken by the trust or institution.

Step 3 Approval or Rejection:

If the Commissioner is satisfied with the application and supporting documents, the registration is granted. However, if the application is rejected, the assessee should be informed in writing of the reason for the rejection.

 

Benefits of 12A Registration

12A Registration, granted by the Income Tax Department, is a one-time registration for trusts and other nonprofit organizations. The primary objective of this Registration is to obtain an exemption from income tax payment. Here are the benefits of obtaining 12A Registration:

1. Tax Exemption:

Entities with 12A Registration are exempted from paying income tax on their surplus income.

2. Government Funding:

Organizations with 12A Registration are eligible for grants and funds from the government and international organizations.

3. Proof of Existence:

The 12A certificate acts as legitimate proof of the existence of the institution, which can be used to avail government schemes, grants, and funds.

4. Enhanced Credibility:

A charitable organization’s credibility is enhanced through 12A registration. It guarantees donors and stakeholders that their donations will be used for their intended purpose, establishing trust and encouraging greater support.

In summary, 12A Registration offers significant advantages to non-profit institutions, including tax exemption, access to government funding, and proof of existence, making it a valuable asset for eligible organizations.

 

Validity of 12A Registration 

12A Registration is a one-time registration granted by the Income Tax Department to trusts and other non-profit organizations. The validity of 12A Registration is as follows:

1. Provisional Registration: For new registrations, a provisional registration is granted for a period of 3 years.
2. Renewal: After the provisional registration period, the organization needs to apply for renewal of the registration
   Renewal
   • Application: The renewal application is submitted in Form 10AB.
   • Renewal Validity: The renewed registration is valid for a period of 5 years

In summary, 12A Registration is valid for 3 years initially, and then it needs to be renewed every 5 years. The renewal application is submitted in Form 10AB, and the renewed registration is valid for 5 years.

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