Taxation

Generally saying, Any NGO, which are engaged with socio-economic activities towards the needs of the general public at large and do not come under the ambit of the Income Tax Act, 1961. But NGOs not registered U/S.12A of the above Act then its total income and the corpus fund will be taxable.

Trust, Society and Section 8 Company can seek registration u/s 12A to claim exemption under provisions of Income Tax Act’1961, if certain conditions are satisfied. Section 12A deals with registration of trust and section 12AA deals with procedure for registration of trust.

1. The NGO will enjoy tax exemption for the expenditure incurred for charitable or religious purpose.
2. The NGOs which has got registered under Section 12A can take grant from various Government Schemes, Funding from Abroad etc.
3. NGO’s get benefit in Foreign Contribution Regulation Act Registration
4. It’s a Life time valid registration, there is no necessary for renewal.

1. Dully filled-in application to be submitted before the exemption Commissioner.
2. NGO will receive notice for explanation from IT Department in 60-75 days.
3. Reply notice to be submit to the IT Department through a proper Advocate specialised in NGO matters.
4. If, called for, the Advocate will appear for the direct hearing
5. Issue of 12A Certification

It is imperative to note that when the 12 A registration is granted, it doesn’t connote that section 80G grant is to be given. In other words the registration under the section 12A will not provide the automatic approval under the section 80G.

It is mandatory that a proper proof of payment should be submitted at the time of submitting the IT Returns in order to get deduction. Further it is always advisable to make the donation by way of Cheque or DD or Bank Transfer. Cash payment is not advisable.

An application for the registration under the section 12A and 8OG can be submitted before the Commissioner of the Income-tax (Exemption). The Registration is valid for 1 to 3 years. We have to apply for the periodical renewal of 80G.