80G Registration

Introduction

A NGO can avail income tax exemption by getting itself registered and complying with certain other formalities, but such registration does not provide any benefit to the persons making donations. The Income Tax Act has certain provisions, which offer tax benefits to the "donors". All NGO's should avail the advantage of these provisions to attract potential donors. Section 80G is one of such sections.

Procedure

If an NGO gets itself registered under section 80G then the person or the organization making a donation to the NGO will get a deduction of 50% from his/its taxable income.

Earlier registration under 80G was given as one-time registration unless any specific restrictions are provided in the registration certificate itself but Finance Act 2020 has made some substantial changes in registration process and period for which approval will be given.

New Registrations

An application for fresh registration under section 80G will be given to Principal Commissioner or Commissioner. A provisional registration for 3 years will be given to organizations. The registration once granted shall be valid for three years from the Assessment Year from which the registration is sought. Application for renewal of such new registration needs to be submitted

- at least six months prior to the expiry of validity period or

- within 6 months from commencement if activities,

whichever is earlier.

The provisional registration so granted shall be valid for a period of 3 years and hence needs to be renewed at the end of the above mentioned timelines. The registration so renewed shall be valid only for 5 years and needs to be renewed at the end of each 5 years.

Existing Registration- Validation & Re approvals

Earlier the approval u/s 80G was valid for perpetuity. The Finance Act 2020 provides that all the existing 80G approvals needs to be revalidated and the application for the same should be submitted within three months from 1st April 2021 i.e. on or before 30th June, 2021. As per amended provisions, the revalidation of registrations will be valid for a period of 5 years and thereafter approval for 80G has to be again applied for at least 6 months prior to the expiry of the registration

Procedure for registration

a) Log on to the E-filing portal of IT department vide https://www.incometaxindiaefiling.gov.in/home

b) Go to “Income Tax Forms” under e-File tab.

c) Select the Form Name as “Form 10A” and relevant Assessment Year from the drop down list.

d) Select the option of “Prepare and Submit Online” in submission mode.

e) Fill in the details as required in the form and attach the required and applicable attachments.

f) Submit the form using digital signatures or EVC as required while return filing.

Documents required to be filled with form 10A/ 10AB

a) Self-certified copy of incorporation document of Trust/Societies (created under instrument or otherwise)

b) 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;

c) self-certified copy of FCRA registration, if the applicant is registered under such Act;

d) self-certified copy of existing order granting approval under clause (23C) of section 10;

e) In case of existing entities, copies of annual accounts for the period not exceeding 3 years immediately preceding the year in which the application is made

f) Where the income of the entity includes profits and gains of business as per the provisions of sub-section (4A) of section 11, copies of annual accounts and audit report u/s 44AB for 3 years immediately preceding the year in which the said application is made

g) Details of activities since its inception or last three years whichever is less.

Conditions to be fulfilled under Section 80G

For approval under Section 80G the following conditions are to be fulfilled :

a) The NGO should not have any income which are not exempted, such as business income. If, the NGO has business income then it should maintain separate books of accounts and should not divert donations received for the purpose of such business.

b) the bylaws or objectives of the NGOs should not contain any provision for spending the income or assets of the NGO for purposes other than charitable.

c) the NGO is not working for the benefit of particular religious’ community or caste.

d) the NGO maintains regular accounts of its receipts & expenditures.

e) the NGO is properly registered under the Societies Registration Act 1860 or under any law corresponding to that act or is registered under section 8 of the Companies Act 2013.

Mandatory Requirement of Darpan Id

The organizations applying for registration/ revalidation as per the amended provisions of section 80G, is mandatorily required to give the details of its Registration number with Darpan portal of Niti Aayog

This is also mandatory in the situation where the applicant organization receives or intends to receive any grantor assistance from either the Central Government or state Government.