In India, 12A and 80G are certifications granted by the Income Tax Department to non-profit organizations, which enable them to offer tax exemptions to donors and enjoy certain tax benefits themselves. Here's a breakdown of both certifications
PurposeThis certification is granted to charitable organizations to exempt them from paying income tax on the donations or grants they receive.
EligibilityNon-profit organizations (such as trusts, societies, or Section 8 companies) that are formed with the primary objective of charitable or religious purposes.
How to ApplyTo get this certificate, the organization needs to apply to the Income Tax Department with the required documents, including the organization’s registration certificate, objectives, and financial statements.
ValidityThe 12A registration is granted once and remains valid as long as the organization continues its charitable activities. However, the department may audit or revoke the registration if the organization fails to comply with the tax laws.
PurposeThis certificate allows donors to claim a deduction for donations made to a certified charitable organization from their taxable income.
EligibilityNon-profit organizations registered under Section 12A can apply for 80G certification. However, not all organizations with 12A status are automatically eligible for 80G status. They must apply separately for it.
How to ApplyAn application has to be submitted to the Income Tax Department with details such as the objectives, activities, and financial records of the organization.
ValidityThe 80G certificate is usually granted for a specific period (e.g., 5 years), after which it needs to be renewed.