Updated on January 16, 2025 12:15:03 PM
12A and 80G registrations are essential for societies in India to get legal recognition and financial benefits under the Income Tax Act, of 1961. These registrations are especially beneficial for non-profit organizations and charitable societies promoting social welfare, education, healthcare, and other public-spirited initiatives.
12A Registration is necessary for the granting of tax exemption on income from the societies. After being registered, a society is perceived as a charitable institution whose income, obtained due to donations or activities integrated with its objects, becomes tax-exempt. This registration is one-time and heavily lifts the tax imposition burden off the societies so that more resources are available for their objectives.
The Registration of 80G gives tax relief to the donor about donations provided to the society. Based on approval from an organization under Section 80G, the donors will get an opportunity to take the deductions 50% or 100% amount on the donation. Therefore, these things stimulate a philanthropy culture and people to engage their charities by employing contribution.
Societies not only get all the financial and legal benefits but also increase their credibility and trust among donors, stakeholders, and the government by availing of 12A and 80G registrations. These will play a significant role in promoting transparency and sustainability for charitable organizations.
12A and 80G registrations are important legal provisions in India for non-profit organizations, including societies, trusts, and NGOs. These registrations, under the Income Tax Act, provide tax-related benefits that help the organization's charitable goals.
12A Registration enables societies to be recognized as charitable entities, exempting them from paying income tax on funds utilized for their charitable purposes. It acts as a fundamental step for organizations to claim income tax exemption on surplus income generated through donations, grants, or other activities aligned with their objectives. This registration is typically obtained once and remains valid unless canceled by the authorities.
80G Registration adds an advantage because the donors are allowed to claim tax deductions for their contributions made to the registered organization. It encourages individuals and corporations to contribute to charitable activities while deriving monetary benefits. The donations made to 80G-registered societies can reduce the taxable income of the donor by up to 50% or 100%, based on the organization's classification.
These registrations, therefore, enhance the credibility of societies while at the same time providing financial sustainability by attracting more donations and ensuring tax compliance.
In India, registration under the provisions of 12A and 80G is an important certification for non-profit organizations like societies that allow such organizations to work much more efficiently in fulfilling their objectives. Here are ways in which these registrations aid such organizations::
To apply for 12A and 80G registration for Societies must provide specific documents to establish their eligibility and compliance. Below is a comprehensive list:
Applying for 12A and 80G registration for Societies involves a streamlined online process through the Income Tax Department’s e-filing portal. Here is a step-by-step guide:
There are no fees levied by the Income Tax Department for the 12A and 80G registration process for Societies
| Category | Details | Approximate Cost (₹) |
|---|---|---|
| Government Fees | No direct fees for Form 10A (12A) or Form 10G (80G) | ₹0 |
| Document Preparation | Auditing, drafting financial statements, and legal documents | ₹5,000 – ₹15,000 |
| Follow-ups and Representation | Additional charges for handling queries or objections | ₹5,000 – ₹10,000 |
| Total Estimated Cost | Combined cost for professional and other services | ₹10,000 – ₹50,000 |
Note: Although the fee is variable, the entire cost will depend upon the level of applicability and the requirement for professional aid.
For 12A and 80G registrations, for societies, there is the jurisdiction of the Income Tax Act while these need periodical renewals under the existing latest rules of renewal.
12A The initial registration given was a lifetime registration with no expiry date. However, in the Finance Act, 2020, amendments introduced the renewal for societies for maintaining 12A registration. This renewal is not only compulsory the first time at the end of the deadline set but also 5 years afterward.
Similarly, 80G Registration also operates on a renewal basis after the Finance Act, 2020. The registrations issued before this without an expiry date have to be revalidated. After revalidation, the registration is valid for 5 years and has to be renewed thereafter.
Changes facilitate societies to avoid regulatory noncompliance, preserve transparency in transactions, and claim tax benefits while continuing their activity. Societies must renew, so that nothing interrupts their exempt status and access to donor rewards. Monitoring activity and applying early enough for a renewal are all the more imperative to ensure seamless validity of both 12A and 80G registrations.
12A and 80G registrations are very essential for non-profit organizations and societies to work transparently and efficiently under the legal and tax framework of India. It is not only beneficial for tax exemptions for the organization but also benefits the donor in terms of tax deductions, which in turn encourages more monetary support for charity. The 12A registration provides the society with income tax exemptions on funds used for its charitable purposes, while the 80G registration encourages donations by offering tax deductions to donors.
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12A registration provides income tax exemptions to charitable societies, allowing them to utilize surplus funds for their social and charitable purposes without paying tax on it. It ensures that the society's income is not taxed, as long as it is used for the society's charitable activities.
80G registration allows donors to claim tax deductions on donations made to the society. It incentivizes contributions to charitable organizations by reducing the donor’s taxable income, either by 50% or 100%, depending on the society’s category.
There are no government fees for filing applications for 12A and 80G. However, societies may incur professional fees for document preparation and submission, which typically range between ₹10,000 and ₹50,000, depending on the complexity of the application.
Yes, a society can apply for both 12A and 80G registrations at the same time. However, 12A registration must be obtained first, as 80G registration requires the society to already have 12A status.
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