12A Registration: Under section 12A of the Income Tax Act, charitable trusts and institutions can apply for registration to claim exemptions on their income. This registration allows the organization to be exempt from paying taxes on the income generated, provided the income is applied for charitable purposes.

• What is it? 12A registration is applicable to charitable trusts & institutions in India. It provides tax exemption to these organizations on their income, meaning they don’t have to pay income tax on the money they receive for their charitable activities.

• Importance: Obtaining 12A registration is crucial for a charitable trust or institution to avail tax exemptions on its income. Without this registration, the organization would be liable to pay taxes on its income, which could significantly impact its ability to carry out its charitable activities effectively.

• Eligibility: Charitable trusts or institutions that are created for charitable purposes such as relief of the poor, education, medical relief, advancement of any other object of general public utility, etc., are eligible for 12A registration.

• Validity: 12A registration is generally valid for an indefinite period unless it is cancelled or surrendered.

80G Registration: Section 80G of the Income Tax Act allows donors to claim a deduction for donations made to specified charitable institutions. Charitable institutions can apply for 80G registration to enable their donors to avail of tax benefits on their contributions.

• What is it? 80G registration is related to tax deductions available to donors who contribute to charitable organizations. Donors can claim tax deductions on the amount they donate to organizations with 80G registration.

• Benefit to Donors: Donors who contribute to organizations registered under section 80G of the Income Tax Act are eligible for tax deductions on the amount donated. The deduction is allowed from the total taxable income of the donor, thereby reducing their tax liability. The amount eligible for deduction varies depending on the specific provisions of the Income Tax Act and the nature of the donation.

• Eligibility: Charitable trusts or institutions that have 12A registration are eligible to apply for 80G registration.

• Validity: 80G registration is usually granted for a specified period, after which it needs to be renewed.

Here’s a brief overview of the process for obtaining these registrations:

12A Registration Process:

The application should be made to the Commissioner of Income Tax (Exemption) having jurisdiction over the institution. Along with the application, the trust needs to provide details such as its objectives, sources of income, balance sheet, and profit and loss account. After submission, the Commissioner will examine the application and may conduct inquiries if necessary. If satisfied, the Commissioner will grant registration under section 12A.

80G Registration Process:

Charitable institutions already registered under section 12A can apply for 80G registration. The application should be made in Form 10G to the Commissioner of Income Tax (Exemption) along with necessary documents. The Commissioner will review the application and grant registration if the institution meets the prescribed criteria. Once registered, the institution’s donors can claim deductions under section 80G for their donations.