Updated on April 14, 2025 04:44:00 PM
Section 8 companies in India are non-profit companies established to undertake charitable activities like education, social welfare, environmental protection, and others. In order to be exempted from tax and for their donors to qualify for tax benefits, such companies need to acquire 12A and 80G registrations from the Income Tax Department.
12A Registration gives relief from taxation to Section 8 companies by holding that the income of the organization will not fall under income tax. Thus, the organization will be able to utilize all the funds for the cause of charity without deductions.
80G Registration helps donors by providing them with an opportunity to deduct taxes on contributions given to the organization. Through Section 80G of the Income Tax Act, qualified donors can deduct a portion of their contribution from taxable income, prompting more donations to non-profit organizations.
Both 12A and 80G registrations are important for Section 8 companies as they help them raise funding, build credibility, and gain the maximum possible contribution toward society. Application is made by filing documents like incorporation certificates, balance sheets, and activity reports with the Income Tax Department.
12A and 80G registrations make a non-profit financially stronger and tax-compliant at the same time, which is why it is a necessary process for every charitable organization.
Table of Content
12A and 80G registrations are a must for Section 8 companies, which are social welfare organizations engaged in social welfare, education, environmental conservation, and other charitable causes. These registrations issued by the Income Tax Department of India offer tax benefits to both the organization and the donors.
12A Registration enables a Section 8 company to be exempt from tax on its profits. After registering, the organization is treated as a non-profit organization, so all its money is spent on charitable activities without any deduction of tax. Without 12A registration, the organization's income would be taxed like any other company.
80G Registration is advantageous to the donors as it allows them tax relief on donations given to the institution. According to Section 80G of the Income Tax Act, donors are allowed to deduct a proportion of their contribution from their taxable income, promoting higher donations towards charitable causes.
Securing 12A and 80G registrations brings immense benefits to Section 8 companies, enabling them to function smoothly while seeking investments. The following are the main advantages:
Advantages of 12A Registration
Advantages of 80G Registration
To apply for 12A and 80G registrations, Section 8 companies must submit various documents to the Income Tax Department of India. Below is a list of essential documents for both registrations:
Applying for 12A and 80G registration for Section 8 involves a streamlined online process through the Income Tax Department’s e-filing portal. Here is a step-by-step guide:
The cost of obtaining and 80G registrations for Section 8 varies based on factors such as professional service fees, government charges, and document preparation. Below is an estimated fee structure:
| Service | Government Fee ( INR) |
|---|---|
| Government Filing Fees | No government fee (Application is free) |
| Expedited Processing Charges (if applicable) | ₹2,000 – ₹5,000 |
Note: Professional Fee For 12A and 80G Registration For Section 8 starts from ₹5,000.
Note: The aforementioned fees are exclusive of GST
Conclusion
12A and 80G registrations are important in making Section 8 companies stronger, allowing them to function effectively and achieve their social goals. 12A registration offers tax exemptions on income, which means more money is available for charitable purposes. 80G registration offers tax relief to donors, which means more donations and sustained financial support.
These registrations give the organization a boost in credibility, transparency, and their eligibility to access government grants as well as corporation CSR funding. Although the application process involves proper documentation and adherence, availing both registrations guarantees financial viability and adherence to tax laws.
At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.
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Frequently Asked Questions (FAQs)
12A registration keeps a Section 8 company out of income tax, which means more money for charitable work.
80G registration gives tax relief to donors, so they will give more and contribute more money.
No, there is no charge from the Income Tax Department, but professional services can cost money.
It is approximately 30 to 90 days, subject to document verification and approvals.
Yes, newly formed Section 8 companies can apply if they are eligible under the required criteria.
No, prior 12A registration is necessary before applying for 80G.
No, they have a specified time limit and need to be renewed according to tax regulations.
No, 80G facilities are for charitable institutions but not for religious activities.
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