Updated on April 14, 2025 04:39:11 PM
Provisional 12A and 80G registration is an important step towards tax exemption and donor benefits, in India, for newly set up charitable organizations, such as NGOs, societies, trusts, and Section 8 companies. The Income Tax Act offers these registrations, which provide temporary permission to operate as a tax-exempt entity while trying to establish credibility and operations.
This provisional registration is valid for three years, allowing ample time for the organizations to prove their charitable activities and fulfill the conditions to acquire permanent certification. With this registration, NGOs can ensure that income utilized for charitable purposes is tax-free (12A) and offer donors a tax deduction (80G), which makes their initiatives more attractive to potential supporters.
Provisional 12A Registration: This temporary registration is granted to new charitable organizations that have not yet obtained full 12A registration. It allows the organization to enjoy tax exemption on its income while it completes the required documentation and formalities for the full 12A registration. Provisional registration lasts up to three years and gives the organizations the time to meet the legal requirements.
80G Registration: This registration is done for donors to obtain a deduction under Section 80G of the Income Tax Act in respect of contributions made to the registered charitable organization. The donations can be in cash or kind, and depending on the type of 80G registration, donors may be eligible to receive a deduction of 50% or 100% of the donated amount.
Table of Content
Provisional 12A and 80G registrations are very important for charitable organizations in India to get tax exemptions and encourage donations.
Provisional 12A Registration: This is a temporary registration given to new NGOs and non-profits, allowing them to enjoy tax exemptions while completing the formalities for full 12A registration. The provisional registration is valid for three years and ensures that the organization can operate without interruptions while meeting the legal requirements.
80G Registration Here, donors are eligible for claiming tax deductions on contributions to the registered charity. The benefit of tax relief enhances philanthropic giving through a registration process, depending upon the nature of the organization wherein a 50% or 100% deduction is allowed in income tax.
Both help to establish legitimacy for any charitable organization, increase transparency, and garner public support because financial benefits accrue to the organization as well as the donor.
Newly formed societies and trusts are granted provisional 12A and 80G registrations. These registrations empower them to operate as they strive to build their track records and meet the precise conditions for permanent registration. The following are some potential benefits:
To apply for 12A and 80G Provisional, NGOs, Trusts, Societies, and Section 8 Companies must provide specific documents to establish their eligibility and compliance. Below is a comprehensive list:
Step-by-Step Procedure for Provisional 12A and 80G Registration:
Note: Under this procedure, newly registered organizations can start accepting donations and apply for tax exemptions right from day one while completing their formalities for full registration.
There are no fees levied by the Income Tax Department for the Provisional 12A and 80G registration process.
Minor expenses may be incurred, though, in the course of doing so, including:
Note: Although the fee is variable, the entire cost will depend upon the level of applicability and the requirement for professional aid.
Provisional registrations of 12A and 80G for newly established societies, trusts, and other charitable associations are provided by the provisions that allow them to demonstrate their record of functioning. This provision is such that the duration is designed to provide time for compliance by such NGOs in getting permanent registration.
Duration for which Provisional Registration is Valid
Period of Provisional Registration: Provisional registration under sections 12A and 80G is valid for 3 years from the date of issue.
Conclusion
Provisional 12A and 80G registrations obtain the credibility of charitable organizations. It is an important and essential step in order for charitable organizations in India, which will help them avoid direct taxes and provide exemptions against tax. This allows an NGO to operate tax efficiently by offering tax benefits to those who donate. Preparation of all the required documents would help in the smooth processing of these approvals and allow organizations to further focus on their core mission - impacting society positively.
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Provisional 12A registration is a temporary registration given to new charitable organizations, enabling them to get tax exemptions on their income for up to three years before completing the formalities of permanent 12A registration.
80G registration allows donors to claim tax deductions on contributions made to a registered charitable organization. This is a great incentive for philanthropy and attracts more funds to NGOs.
Any type of charitable organization, such as a trust, society, or section 8 company, engaged in charitable, educational, or religious activities is eligible to apply for 12A and 80G registrations.
Provisional 12A registration is valid for three years from the date of issue.
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