80G Registration in India
Section 80G of the Income Tax Act, 1961 allows individuals and organizations to claim tax deductions on donations made to eligible charitable organizations. If an organization holds an 80G certificate, it means donations made to it qualify for tax exemptions, helping donors reduce their taxable income.
What is 80G Registration?
80G registration authorizes charitable organizations to accept tax-deductible donations. It benefits both the organization and its donors:
- For NGOs: The registration allows them to legally accept donations that qualify for tax exemptions.
- For Donors: They can claim deductions on their taxable income based on the donations made to the registered NGO.
Recent amendments under the Finance Act 2020 have introduced requirements for NGOs with 80G registrations to file annual returns, ensuring compliance with the guidelines set by the Income Tax Department.
What is an 80G Certificate?
The 80G Certificate is a key certification granted to non-governmental organizations (NGOs), including Section 8 Companies and charitable trusts. This certificate enables financial contributions to recognized nonprofit entities, allowing donors to claim tax exemptions. When individuals or businesses make donations to these charitable organizations, they can deduct the donated amount from their total taxable income, reducing their tax liability.
To avail of this exemption, donors must provide a receipt containing specific details such as the donation amount, the date of donation, and the institution’s PAN number.
80G Registration Validity and Renewal:
- Provisional Registration: Initially, the provisional registration under 80G is valid for three years.
- Renewal: After three years, the registration must be renewed. Following successful renewal, the registration remains valid for five years.
- Regular Registration: To maintain continuous benefits, NGOs need to apply for regular 80G registrations within the last six months of their provisional registration.
Obtaining 80G registration provides several benefits to your NGO, including:
- Tax Deductions for Donors: Donors can claim tax deductions ranging from 50% to 100% of their donations.
- Increased Credibility: Being registered under 80G enhances your NGO's credibility, making it more appealing to potential donors.
- Increased Donations: The tax benefits make your organization more attractive to both individual and corporate donors.
- Wider Reach: With 80G registrations, your NGO can reach a broader donor base, enhancing its ability to fund and grow its charitable activities.
- Transparency & Compliance: 80G registration ensures your organization operates transparently and in compliance with the legal standards.
To complete the 80G registrations process, the following documents are necessary:
- Trust Deed (for Trusts)
- Memorandum of Association (MOA) for NGOs and Section 8 companies
- Registration Certificate (for Section 8 Companies/Societies)
- Certificate of No Objection from the property owner where the NGO is based
- Form 10G – Required for 80G registration
- NGO’s PAN Card
- Proof of Address – Utility bills (electricity, water, or property tax receipts)
- Donor Details – Names, addresses, and PAN details of donors
- Financial Statements – Bank statements, books of accounts, and income tax returns for the last three years
- Project Details – List of welfare projects and a three-year progress report
To qualify for 80G registrations, your organization must meet the following requirements:
- Legal Structure: The organization must be registered as a trust, society, or non-profit company.
- Non-Profit Objective: The organization must be focused on charitable activities rather than profit generation.
- Proper Documentation: Accurate accounting records must be maintained, with audited accounts for transparency.
- Adherence to Income Tax Compliance: The organization must comply with Sections 11 and 12 of the Income Tax Act.
- Non-Exempt Business Income: The organization should not generate non-exempt income from business activities.
- Darpan Portal Registration: If your NGO receives government grants, registration with the Darpan portal is mandatory.
- Audit Reports: If the NGO's income exceeds the threshold specified by the Income Tax Act, its accounts must be audited by a chartered accountant.
- Utilization of Funds: At least 85% of income must be spent on the organization's charitable objectives in India.
FilingIn simplifies the process for obtaining 80G registration. Here's how we guide you step-by-step:
- Submit Application: We help you submit your application using Form 10A, which is required for 80G registrations. This form is submitted to the Commissioner of Income Tax in your NGO’s jurisdiction.
- Document Examination: The Income Tax Department will review the submitted documents. At FilingIn, we ensure all documents are complete and in compliance with the regulations to minimize delays.
- Provide Additional Information (if needed): If the Income Tax Department requires additional information, we will assist you in responding promptly.
- Issuance of Certificate: Once your application is reviewed and approved, you will receive the official 80G registration certificate, which will allow you to start accepting tax-deductible donations.
- Provisional to Regular 80G Registration: If your NGO has provisional 80G registrations, we will help you transition to regular 80G registration after three years, ensuring continuous benefits.
At FilingIn, we make the 80G registrations process simple and seamless. Whether you're a new organization or need assistance with renewal, our experts guide you through every step, ensuring your NGO complies with all requirements and enjoys the tax benefits. Focus on your mission while we handle the paperwork.
Get started with FilingIn today to receive your 80G certificate and maximize your fundraising potential!
Frequently Asked Questions in India
What is 80G Registration?
80G Registration allows charitable organizations to accept donations that are eligible for tax deductions for the donor, reducing their taxable income.
Who can apply for 80G Registration?
Charitable organizations, trusts, or NGOs that are involved in activities related to charity, relief, education, or health are eligible to apply for 80G registration.
What are the benefits of 80G Registration?
Organizations with 80G registration can receive donations that qualify for tax deductions. Donors also benefit by reducing their taxable income based on the amount donated.
Is 80G Registration permanent?
No, 80G registration is not permanent. It needs to be renewed periodically, and non-compliance with regulations can lead to the cancellation of the registration.
What is the validity of an 80G Certificate?
The validity of an 80G certificate typically lasts for 5 years, after which it needs to be renewed.
Can individuals claim deductions under 80G?
Yes, individuals and corporations can claim deductions under Section 80G on donations made to registered charitable organizations.
What documents are required for 80G Registration?
Common documents required include the organization’s registration certificate, PAN card, audited financial statements, and a list of trustees or managing committee members.
How do I apply for 80G Registration?
You can apply for 80G registration by filing the application online through the Income Tax Department’s portal or through a professional service provider.
Are there limits on the amount of donation eligible for tax deductions?
Yes, the amount of deduction depends on the type of donation and the recipient organization. Some donations are eligible for 100% deduction, while others are eligible for 50%, subject to limits.
What happens if the organization fails to comply with 80G regulations?
If an organization fails to comply with 80G regulations, the registration can be revoked, and it may lose the benefits associated with it.
