In India, there are lakhs of NGO registered in the form of Trust, Society and Section 8 Company. But due to lack of financial support a limited number of NGO are working for the social welfare activities. Some big NGOs like The Earth Saviours Foundation, Akshaya Patra Foundation, Smile Foundation are doing social welfare activities at vary large scale. As they are doing social welfare activities, they also get financial support from big corporates in the Form of CSR Grants.

The main source of income for all NGOs are donation from society. Any person who donates money to the NGO wants to get tax benefits against its donation. For giving income tax deduction benefits to these donors, the NGO must be registered under Section 80G of Income Tax Act, 1961. If you are running NGO and needs financial support then this article will help you. In this article, we will discuss about the Section 80G Registration – Process, benefits of this registration and compliances that must be done by NGO to reap the benefits of this registration for a longer period of time.

Section 80G Registration Process

If you want to enrol under Section 80G of Income Tax Act for the first time, then you have to apply in Form 10A otherwise you have to apply in Form 10AB. The application shall be accompanied by the following documents:

(a) where the applicant is created, or established, under an instrument, self-certified copy of the instrument;

(b) where the applicant is created, or established, otherwise than under an instrument, self-certified copy of the document evidencing the creation or establishment of the applicant;

(c) self-certified copy of registration with Registrar of Companies or Registrar of Firms and Societies or Registrar of Public Trusts, as the case may be;

(d) self-certified copy of registration under Foreign Contribution (Regulation) Act, 2010 (42 of 2010), if the applicant is registered under such Act;

(e) self-certified copy of existing order granting registration under clause (vi) of subsection (5) of section 80G;

(f) self-certified copy of order of rejection of application for grant of approval under clause (vi) of sub-section (5) of section 80G, if any;

(g) where the applicant has been in existence during any year or years prior to the financial year in which the application for registration is made, self-certified copies of the annual accounts of the applicant relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up;

(h) note on the activities of the applicant.

After filing of Application, the competent authority will verify the required documents and on the basis of which Provisional/ Final Registration certificate will be issued to the NGO.

Benefits of Section 80G Registration

As explained above, the main source of Income for NGO is donation received from society and donor is willing to donate to that NGO which gives him tax benefit. There are many benefits of Section 80G Registration:

> As the Donor is getting Tax benefit, more peoples are willing to donate

> If NGO want CSR Grants from Corporates, then they have to register themselves with MCA by filing Form CSR-1. And one of the conditions for Form CSR-1 registration is that the NGO must be registered u/s 12A and 80G of Income Tax Act. If NGO is registered under both sections, then they can approach corporates for getting CSR Funding after filing Form CSR-1

> If NGO wants foreign donation, then FCRA Registration is mandatory. Section 80G Registration helps in FCRA Registration also.

> Helps in getting donation from big NGOs

Compliances after Section 80G Registration

> The NGO shall maintain its accounts regularly and also get them audited as per the provisions of section 80G(5)(iv) read with section 12A(1)(b)/10(23C) of the Income Tax Act,1961

> The NGO must report on annual basis, the details of donors in Form No – 10BD

> The NGO must issue Certificate of donation to the donor in form no 10BE, as per the provisions of rule 18AB

> The NGO must file its Income Tax returns on or before the prescribed due date

Note: Non compliance of above requirements invites monetary penalty and in case of non-compliance on regular basis, it may liable to cancellation of Section 80G Registration

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Disclaimer: This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s person experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of others readers.

The Author can be reached at mail –[email protected] and Mobile/Whatsapp – 9911303737 / 9716118384

Author Bio

Qualification: CA in Practice
Company: Shiv Kumar Sharma & Associates
Location: Delhi, Delhi, India
Member Since: 03 Dec 2018 | Total Posts: 73
My Self CA. Shiv Kumar Sharma. I am a member of "The Institute of Chartered Accountants of India" since 2012. I have Qualified my B.Com (H) in 2010 And Cleared CS- Executive Exam in June 2013. Currently, I am in Practice and dealing in Direct and Indirect taxation along with ROC Compliances. View Full Profile

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