What Are The Benefits Of 80G Certificate

What Is NGO Or (Non-Government Organization)

A Non-Government Organization or NGO is a group that works Independently From Government and works for humanity, the environment, or political welfare. Such as providing clothes, food, and shelter to poor people, helping poor kids by opening free educational institutes and providing them education, NGOs also take care of left-alone animals provide medicine food, and shelter as well as work for environment such as global warming, deforestation, and many more. Most NGOs are non-profitable organization so they rely on volunteers who provide their time for free some NGOs have to hire people according to their needs. According to World Bank divide them into two groups

1. Operational NGOs
2. Advocacy NGOs

There are some NGOs that fall into both categories NGOs that support human rights, advocate for better health, or encourage political participation are examples of NGOs. In India The first NGO to be officially registered as a Non-Governmental Organization was established in 1917 by Gangendra Nath Tagore, Guru Rabindranath Tagore’s nephew, for the rehabilitation and re-establishment of wavers, the Silk handloom industry, and artists of Calcutta, now Kolkata, and it is still contributing to their welfare.

What is 80G Certificate?

In this blog, we are going to tell you about sections 80G and 80G Certification. Section 80G gives 50% exemption from paying tax on the Donation money. This exemption is not applicable to every organization, only those organizations which qualify under the act can apply for this tax exemption. There are certain funds and charitable organization that gets the tax exemption in section 80G with a basic qualifying limit which should not be more than 10% of adjusted gross total income. Taxpayers who donate an amount to some charitable trust or any such organization can claim a tax deduction under section 80G while filing Income tax returns.

Organizations that are contributing something to the development of the nation or some kind of philanthropic organization are included in the section of 80G. NGOs and action aid groups or organizations can also register under section 80G because they are working as a charitable trust and they are contributing to the help of the weaker section of the population. The tax exemption under section 80G was an initiative to promote and encourage people to donate more in development or to give up liftmen to the weaker section of society.

Terms & Conditions For The Tax Deduction Under Section 80G –

There are some terms and conditions which you need to keep in mind before claiming you tax exemption under section of 80G. There are three main terms and conditions which are mentioned below:

• A taxpayer can’t claim his tax exemption if he contributes over Rs. 2000/- in cash. The government changed these terms and conditions in the 2017 annual budget.
• All the Contributions made in the form of a kind are not eligible to claim the tax deduction under section 80G of the Income Tax Act. Only the contributions made in cash are eligible for claiming the tax deductions.
• If a taxpayer donates an amount to some foreign organization then he is not eligible to claim a tax deduction under section 80G.

Which Types Of NGOs And Charitable Organizations Are Eligible For The 80G Registration:

1. An organization with Zero income business is eligible for 80G registration. In case of any business income, they have to maintain a separate bank account for that. They can’t use donation money in their private business.
2. Every registered society or charitable trust is eligible for 80G registration but their work should not target a specific religion, caste, or race.
3. An organization that doesn’t use its income or any kind of assets for any other purpose and uses it only for charity is eligible for 80G registration and the organization should keep its receipts and expenses maintained.

What Are The Documents Required For 80G Certification

Here is a list of documents required for 80G registration:

• Applicant must have Form 10G for the registration of 80G.
• A Registration certificate from MoA will be required for the Section 8 companies and Societies.
• Applicants must have a Trust Deed in case they are working as a Trust.
• No objection certificate (NOC) from the owner of office land property will also require.
• NGO must have a copy of the PAN card.
• Electricity bills, water bills, and other utility bills would require.
• Organizations must have a Donor list and their complete address and PAN.
• Last three year Book of Accounts & Income Tax Return documents of the organization.
• Last three years list of welfare activities of the organization.
• A complete list of all the board of trustees.
• Original RC (registration certificate) and MoA, COI, or Trust Deed will also require.

Registration Process

• 80G Certificate application needs to submit at the office of the commissioner of the Income-tax (exemption) in the judicial area of the organization.
• The Income Tax agency conducts an online examination after the application and paperwork for 80G registration are submitted.
• Department officials can ask for further book of accounts and proof that the institution have to give to the officials
• Then the Income-tax Commissioner grants an 80G certificate to the institution after the complete document verification and close examination of the NGO office.

Benefits of 80G Certification

80G certification provides a lot of tax benefits but along with that 80G certification gives a lot of benefits to the organization: –

• Organizations will get huge tax exemption benefits from the government.
• The organization will get up to a 10% tax deduction over the gross income which includes donations and funds.
• The donors of the organization will also get a tax exemption of up to 10% as they will get the donation receipt.
• The benefits of FCRA registration are also available to non-profit organizations.

What Exactly is 12A Certification?

The Indian Income Tax Department issues 12A certification to registered non-governmental organizations (NGOs), charitable trusts, and religious trusts, exempting them from taxation on donations for life. All NGOs must pay the same tax rates as other organizations if they do not have a 12A registration. This certification is valid for life, but it can be revoked at any time if the applicant is unable to provide legal documentation and proof, is found guilty of illegally supporting people of color, or becomes biased toward any particular group or religion.

Apply For 12A Certification: –

The application must be made on Form 10A, according to Rule 17A of the Income Tax Act of 1962. The application must be filed with the Jurisdictional Commissioner of Income Taxes (Exemptions). After receiving the Form and the documents, the Commissioner verifies the authenticity of the organization’s activities. He has the authority to request any additional documents or information he deems necessary. Based on the satisfactory report, he will issue a written order granting 12A Registration. If the Commissioner is not satisfied, the application will be rejected, and the applicant will be given a fair hearing.

Issue Of Certification

On Receipt of application of 80G, The Commissioner is eligible for ordering to register the trust or Institution and also has the authority to ask for further documents from the applicant if requires. The Commissioner also Has the authority to cancel or reject the application if he found any mistake or anything wrong in the application. After issuing the certificate the validity of the trust is valid for one to three years.

Conclusion

So we have discussed all 80G certificates their benefits and application procedure and additional certificate necessary with 80G certificates such as 12A Certificate. The main goal of the 80G certificate is to encourage more people to donate money to such organizations which work for the welfare of the weaker section of the Society with its as well as Environment in exchange donors will also get the extra benefit of tax exemption of up to 50% on the receipt of his donation. These donations will not be added to his gross total income.

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