Registrations under 12A and 80G
                     
REGISTRATIONS 
UNDER 12A AND 80G
What do sections 12A and 80G 
refer to?
 Sections 12A and 80G refer to the 
respective sections from the Income Tax 
Act, 1961. 
 The two sections are in special relation to 
the non-profit entities, which may include 
NGOs, religious organizations, trusts etc.
 The chief advantage of being registered 
under the abovementioned sections is 
that you can get a tax rebate in terms of 
your income tax.


What is Section 12A?
 Section 12A of the Income Tax Act, simply 
describes that which entities can be 
regarded as non-profit organisations.
 If an association fits the definitions 
provided in the section, it can be 
regarded as a non-profit organisation and 
be registered under the section.

Who can register under 
12A?
     Applied before 1st July,     An institution whose 
1973 or within one income exceeds 50 
year of the thousand in any 
establishment of the previous year.
institution or trust
What happens when you 
register under 12A?
 Registration under 12A grants a tax 
exemption certificate to the organisation.
 In its absence, normal tax rates will have 
to be applied on the institution.
 It acts as a proof of the rightful existence 
and goals of the organisation.
 It would help you seek grants from the 
government as well as from the 
associations that function outside India.

What is Section 80G?
 Section 80G of the Income Tax Act, 
simply gives provisions for deduction in 
taxes with respect to donations to certain 
funds and charitable trusts.
 This section provides a long list of the 
institutions or funds, where you can get 
tax deduction on donations.
 Any donation to such trusts or funds, will 
help you get 50% deduction on the taxes.

Which institutions come under S. 80G
National defence fund           PM’s National Relief 
Fund
Non-profit Organisations                       NFCH
                                                                               
and others...
What is the affect of registration 
under this section on the donors?
 It lets the donor have the dual benefits of 
donation and tax-reduction.
 In the first case, it makes the donor feel 
good about the donation he has made for 
a positive cause, i.e. the cause 
concerning the respective organisation.
 On the other hand, the donor is 
benefitted as he can redeem some 
money.
...contd.
 The donors can use the registration in the 
section to reduce the amount they 
donate from their total incomes.
 The section also lets the organisation 
become a more valuable one in the eyes 
of the society.
 Registration under section 80G also 
increases an organisation to get 
donations from foreign sources.
Can an organisation be disqualified 
from the tax exemption?
 Yes, an organisation can be disqualified 
from tax exemption.
 Even after registering completely and 
properly under the required sections, i.e. 
Section 12A and Section 80G and 
meeting all the requirements for tax 
exemption under the Income Tax Act, 
1961, an organisation may still be 
debarred from tax exemption.
Conditions under which an 
organisation can be disentitled
1. If the organisation has any ‘non-
exempted income’, i.e. any business or 
commercial purpose which is not to be 
included in the ambit of the required 
sections.
2. If the organisation does not maintain its 
routine account of expenditures and 
receipts as is required by it to do, its tax 
exemption is forfeited.
...contd.
3. If the charitable organisation is and is 
registered as an NGO, but, is engaged in 
promoting the interests of a particular 
caste or community or is engaged in 
some religious affairs, it will have to give 
up its tax exemption.
4. If the NGO is not duly registered under the 
Societies Registration Act, 1860 or under 
the Companies Registration Act, 2013.
Is there a limit on donations to 
the organisation?
 The Income Tax Act also lays a limit on 
the donations that can be made by one 
donor to an organisation.
 It is a misconception that there is 50% 
deduction for the amount donated.
 However, this is only partially right, 
because, the donor can only donate 10% 
of his total gross income.

...contd.
 The 10% of the gross total income or 
more precisely, the gross adjusted total 
income (according to the language of the 
act), only, can be considered for the tax 
exemption purposes, so that, evil-minded 
businessmen cannot use the law as a 
method of tax-evasion.
Conclusion 
 Therefore, it can be said that the sections 
12A and 80G of the Income Tax Act are a 
boon for the charity organisations. 
Whereas on one hand, Section 12A helps 
the respective organisations to be 
exempted from tax rates; on the other 
hand, Section 80G gives the donors a 
benefit of money redemption from their 
taxable income, thus, leading to more 
and more donations and increased 
charity.