Summary: Section 80G(5) Registration allows NGOs and non-profit organizations in India to offer tax deduction benefits to donors, enhancing their appeal and credibility. However, many face delays or rejections due to common mistakes during the application process. Key errors include submitting incomplete or incorrect documents, not obtaining prior registration under Section 12A, maintaining poor financial records, mismatches in critical details across documents, incorrect filing of Form 10A, failure to update changes in trustee or address, and missing application deadlines. To ensure smooth approval, NGOs must maintain updated and audited accounts, cross-check all documents, ensure active 12A registration, and file Form 10A correctly through the Income Tax portal. By avoiding these mistakes and being thorough with compliance, organizations can improve their chances of successful 80G(5) registration, attract more donations, and build trust among stakeholders.
Non-Profit Organizations (NPOs) and NGOs in India goal to achieve Section 80G(5) Registration to provide tax deductions to their donors. While the process appears simple, many businesses still face unnecessary delays or rejections because of common errors during the duration of the registration.
In this article, we shall cover these errors, explain the common mistakes to avoid Section 80G(5) Registration.
What is Section 80G(5) Registration?
Section 80G(5) Registration lets in NGOs and charitable establishments to offer tax deduction benefits under Section 80G of the Income Tax Act, 1961. Donors contributing to Section 80G(5) registered business can claim a deduction of up to 50% of the donated quantity, making your business more appealing to customers.
Benefits of Section 80G(5) Registration
- Attracts greater donations by offering tax savings to donors.
- Enhances credibility and builds belief among stakeholders.
- Eligibility for authorities investment and CSR contributions.
- Creates transparency about the NGO’s financial and compliance practices.
Common Mistakes to Avoid During 80G(5) Registration
1. Incomplete Documentation
Submitting incomplete or wrong documents is one of the most common mistakes for rejection.
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Registration certificates
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Trust Deed or Memorandum of Association
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PAN Card of the entity
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Audited monetary statements for the ultimate three years
2. Non-Registration under 12A
An corporation ought to be registered below Section 12A before applying for 80G(five) Registration. Without 12A, the application may be rejected mechanically.
3. Financial Non-Compliance
Organizations ought to preserve proper accounting statistics and feature their accounts audited yearly. Lack of financial transparency increases doubts during verification.
4. Mismatch of Details
Mismatch among the name, cope with, or goals stated in specific documents (like PAN, registration certificates, bank info) can result in delays or rejections.
5. Incorrect Filing of Form 10A
Form 10A needs to be efficiently filled and submitted on-line. Missing fields, wrong class choice, or wrong supporting documents can cause rejection.
6. Failure to Update Changes
If there was any exchange in the trustee, address, or goals, and if such adjustments are not updated with authorities, the software may get confused.
7. Delay in Filing
Post the Finance Act 2020, NGOs need to follow for validation or fresh registration within unique cut-off dates. Delays in filing can result in the lack of Section 80G benefits.
Tips for Successful Section 80G(5) Registration
- Cross check all the supporting documents.
- Ensure earlier Section 12A registration is active.
- Keep audited money owed equipped and up to date.
- File Form 10A carefully through the Income Tax portal.
Conclusion
Getting Section 80G(5) Registration is crucial for any NGO seeking to build credibility and attract donations. Avoiding the common mistakes listed above can make the process smoother and faster. Being thorough and compliant will help you achieve smooth registration.
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