REGISTRATION U/S 80G DEDUCTION
Charitable organisations/associations such as Society, Trust, etc by applying to the Department of Income Tax for registration under 80G can avail the income tax exemption only, but it does not provide any benefit to the persons making donations in such organisations. The form along with the application should be filed as early as possible just after the registration of the given organisation. In case of renewal of 80G registration, the same form can be used.
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REGISTRATION OF DEDUCTIONS UNDER INCOME TAX
SECTION 80GGA - Section 35AC is available to assess who has income from the head ‘business' or ‘profession'. Therefore, for the assesses who are not having income from business or profession, this section 80GGA provides them with a deduction on donations made to eligible projects under section 35AC.
Section 80GGA provides some deductions for contributions made for scientific research under sections 35CCA & 35CCB, which have been withdrawn. In total a 100 percent deduction would be available under section 80GGA, subject to the available gross total income of the assesses as per section 80A. Also, unlike section 35AC, deduction under section 80GGA cannot be carried forward in the form of losses to next year.
SECTION 80G - Section 80G of the Income Tax Act provides an Income Tax Payee to claim a deduction for the donation made by them to a certain charitable organisation which is subject to following conditions namely –
- To whom the donation has been made.
- The amount of donation like they are exempted from 100% to 50% of the amount of donation depending on the type of organisation.
.CONDITIONS TO HAVE COMPLIED FOR 80G DEDUCTION.
For U/s 80G approval the below requirement is to be complied with:
- The non-governmental organization should not have any income from any source which is not exempted, such as business income. If the NGO is having any business income, then a separate book of accounts should be maintained, and no diversion of donations received be done for the purpose of such business.
- The objectives of the NGOs should not contain any provision regarding the spending of the income or assets of the NGO for purposes other than charitable i.e. they should not violate any activity prescribed.
- The non-governmental organization is not working particularly for the benefit of any religious community or caste.
- The trust, society or nonprofit company maintains regular accounts of its receipts & expenditures, and proper audits be done whenever required.
- The NGO is registered under the Societies Registration Act 1860 or under any law as applicable, corresponding to that act, or is registered under section 25 of the Companies Act 1956. And is taking timely renewal from concerned authority.
DOCUMENTS REQUIRED FOR 80G DEDUCTION.
The application form is required to be sent in a triplicate form to the Commissioner of Income Tax in accompany with the following documents, namely -
- FORM—10G for U/S 80G registration
- Registration certificate along with MOA / Trust Deed (two copy – signed and stamped)
- NOC from Landlord
- PAN copy
- Electricity Bill / House tax Receipt / Water Bill photocopy as address proof of the organisation.
- Evidence of welfare activities carried out & Progress Report since inception.
- Books of Accounts & ITR, if any, since their establishment.
- Copy of income tax registration certificate.
- Detail of activities or objects since its establishment or last three years whichever is less
- Copies of audited accounts and statements of the institution/NGO since its establishment or last 3 years whichever is less.
EXTENT OF BENEFIT FOR 80G DEDUCTION
If an NGO gets itself registered under section 80G, then the donors making a donation to the NGO will get a deduction of 50% from his/its taxable income. The NGO has to apply in Form No. 10G to the Commissioner of Income Tax for such registration and is generally granted for a period of 2-3 years.
When calculating an assessee's total income and calculating the deductible amount under section 80G, the aggregate of the sums donated must first be determined. Then, 50% of such donations must be discovered, and they should be limited to 10% of gross total income. If this amount is greater than 10% of gross total income, the excess must be ignored.
The Finance Act of 2009 removed the five-year restriction from the proviso to subsection (5) clause (vi). In other words, registration certificates issued after October 1, 2009, can only be used once, unless a particular restriction is specified in the certification itself.
For more information and to obtain services for registration under Section 12A and approval under Section 80G, please contact email@example.com or 9555 555 480.