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12A certificate for NGO

How to get 12A certificate for NGO

As we aware that after NGO registered, there are many statutory compliance to be fulfilled. One of them is to get exemption certificate from Income Tax. As per Income Tax Act in India, NGOs are exempted from tax under section 12A.

Why Sec 12A registration required?

NGO is registered for non-profit activities. However, there may be income of NGOs. If NGO does not have registration certificate under section 12A of Income Tax Act, It has to pay tax as per normal rates. So to get income tax exemption, it is necessary to have 12A certificate.

Procedure to apply for 12A Certificate

NGO has to apply to the Commissioner of Income Tax (Exemption Department) in Form No 10A. See below video for detail procedure.

Details to be fill in Form 10A

1. Name and Address of the Trust

2. Name, Address, Occupation of the founders / trustees

3. Date of Registration

Documents to be attached

1. Certified Copy of Registration Document

2. Certified Copy of PAN

3. Certified copy of Memorandum of Trust

Conclusion

It is a very simple process to file this form. After filling this form, Commissioner of Income Tax, if find that all the conditions laid down in Sec12AA are fulfilled, issue 12A certificate for exemption from Income Tax.

Statutory compliance for ngo in india

Statutory Compliance for NGO after its registration

We have already discussed in this post about how to form NGO. After forming NGO in India, there are statutory compliance for NGO, which requires utmost care. Let us discuss all in detail, one by one.

PAN

After registration of NGO with State Charity Commissioner or Collector or Society Registrar, first thing is to apply for PAN of NGO. It is compulsory to apply for PAN after registration of NGO. You can apply PAN online through this website.

Registration u/s. 12A of Income Tax Act

Commonly known as 12A certificate, this registration is NOT mandatory. Purpose of getting this registration u/s. 12A is to get exemption from Income Tax on the Income of the trust, if all the conditions laid down in this section are fulfilled. You can check detail procedure here how to apply for 12A certificate.

Registration u/s. 80G of Income Tax Act

Again, this is NOT a mandatory one. However to give benefit of 50% or 100% exemption on donation to our donors, it is per-requisition to get the registration u/s. 80G of Income Tax Act. It is indirectly benefited to NGOs to raise funds. Go through this post for detail procedure to get 80G Certificate.

FCRA Registration

If there are possibilities to receive Foreign Funds for projects of NGO, a registration with FCRA department, Ministry of Home Affairs is compulsory. Without FCRA registration, NGO cannot receive any foreign donation or grants. Check more FAQs on FCRA here.

TAN

During the working of NGO at any point of time, if NGO become liable to deduct tax from source, it has to first apply for TAN. Like PAN , TAN application can be made online thought this website.

Service Tax Registration

Only when NGO is providing services like consultancy work or research activity etc… and if gross revenue from such activity cross the basic exemption limit of service tax, then NGO has to first apply for Service Tax Registration number. Again it is an online procedure and you can apply for registration here.

Professional Tax

Professional Tax is a liability of NGO to deduct from the salary of employee and deposited to Government. Professional Tax is State Government look out and thus different states of India having different rules for Professional Tax.

Retirement Benefit

Retirement benefits like Provident Fund, Gratuity, ESIC etc.. is applicable to NGO when it grow up and having employees more than prescribed limit in this acts.

Summary

Depending upon the work and size of NGO, you can either apply for all the above statutory compliance immediately after registration of NGO or you can apply as and when requirement arises.

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