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Section 80G Registration

Apply Section 80G Registration Online with Kanakkupillai and maximize donations with tax benefits for your supporters. Donors and contributors can claim tax deductions on their donations. Our team assists in preparing documents, filing applications, and obtaining the certification, helping you enhance your fundraising potential.

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Section 80G Registration Under the Income Tax Act, 1961

Charitable organizations play an important role in addressing various social, economic, and environmental issues. These entities, including trusts, societies, and Section 8 companies, work tirelessly to uplift communities through education, healthcare, and social welfare initiatives. To encourage the establishment of such organizations, the Indian government has provided tax incentives to donors through Section 80G of the Income Tax Act, 1961. The section allows donors to claim deductions of 50% or 100% of the amount donated, depending on the nature of the organization and the cause supported. Obtaining 80G registration is essential for organizations as it enhances credibility and also attracts more donations by providing tax benefits to donors. 80G registration is often a prerequisite for receiving corporate social responsibility (CSR) funds.

What is Section 80G?

Section 80G of the Income Tax Act, 1961, allows taxpayers in India to claim deductions on donations made to eligible charitable institutions. Depending on the nature of the institution and the cause supported, the deduction can be 50% or 100% of the donated amount.

Benefits of Section 80G Registration

For Donors

Tax Deductions: Donors can claim deductions of either 50% or 100% of the donated amount, depending on the kind of organization and the nature of the donation made.
Broad Eligibility: The deduction is available to various kind of taxpayers, such as, companies, firms, Hindu Undivided Families (HUFs), and Non-Resident Indians (NRIs).
Contribution to Nation Building: Through their donations, the donors help in nation-building by supporting initiatives aimed at addressing critical social and economic issues.

For Organizations

Increased Donations: Tax benefits make donating more attractive, potentially leading to increased contributions.
Credibility and Recognition: 80G registration serves as a mark of authenticity, enhancing the organization's reputation among stakeholders.
Eligibility for Government Funding: Many government grants and CSR funds require recipient organizations to have 80G registration.

Eligibility Criteria for 80G Registration

To qualify for 80G registration, an organization must:

1. Legal Structure

The organization must be legally registered in India as one of the following:

Trust under the Indian Trusts Act, 1882
Society under the Societies Registration Act, 1860
Section 8 Company under the Companies Act, 2013

2. Non-Profit Objective

The primary objective of the organization should be to promote charitable activities for the education of needy people, medical relief, and advancement for the general public utility without any profit-making motive.

3. Registration under Section 12A

Prior registration under Section 12A of the Income Tax Act is mandatory.

4. Proper Maintenance of Accounts

The organization must maintain proper books of accounts, and it must be audited by a practising Chartered Accountant (CA).

5. No Benefit to Specific Religion

The organization should not be established for the benefit of any particular religious community or cast.

6. Compliance with Other Laws

The organization must comply with all applicable laws and regulations. If the organization receives funds from a foreign national or an entity, it must comply with the provisions of the Foreign Contribution (Regulation) Act, 201

Step-by-Step Process for Section 80G Registration

Application Process for 80G Registration

Step 1: Prepare Necessary Documents

Form 10A or 10AB: Depending on whether it's a fresh application or a renewal.
Registration Certificate: Proof of registration under the relevant act (Trust Act, Societies Registration Act, or Companies Act).
Trust Deed or Memorandum of Association: Governing documents outlining the organization's objectives and operations.
PAN Card: Permanent Account Number of the organization.
Financial Statements: Audited accounts and the financial statements for the past three years, if applicable.
Activity Report: Details of charitable activities undertaken in the organisation.
List of Trustees or Governing Body Members: Including their contact details and PAN numbers.
Donor Details: List of donors with their addresses and PAN numbers, if available.

Step 2: File the Application

Online Submission: Applications must be submitted electronically through the Income Tax Department's portal at Home | Income Tax Department.
Verification: The application should be verified using a Digital Signature Certificate (DSC) or an electronic verification code (EVC).

Step 3: Assessment by the Commissioner

Review: The Commissioner of Income Tax (Exemptions) will review the application. The department may request additional information or documents.
Approval or Rejection: Based on the assessment, the Commissioner will grant or deny registration. If denied, reasons will be provided, and the organization will have an opportunity to respond.

Validity and Renewal of 80G Registration

Previously, 80G registration was granted for perpetuity. However, the Finance Act, 2020, introduced changes requiring periodic renewal:

Provisional Registration: New organizations receive provisional registration that is valid for three years.
Final Registration: Organizations must apply for final registration at least six months before the expiry of the provisional registration or within six months of commencing activities, whichever is earlier.
The existing registrations are now valid for five years and must be renewed accordingly.

Compliance Requirements Post-80G Registration

1. Issuance of Donation Receipts (Form 10BE):

The Organizations must issue receipts for each donation received, containing:

Name and address of the donor
PAN of the donor
Amount donated
Mode of payment
Unique Registration Number (URN) under Section 80G
Date of donation
These receipts should be issued in Form 10BE, as prescribed by the Income Tax Department.

2. File Financial Statement of Donations (Form 10BD):

Organizations must file Form 10BD by May 31st of the financial year in which donations are received.

3. Maintenance of Proper Books of Accounts:

Organizations are required to maintain accurate and up-to-date books of accounts, reflecting all financial transactions.
These records should clearly show the utilization of donations for charitable purposes.
Proper accounting facilitates audits and inspections by regulatory authorities.

4. Annual Audit of Accounts:

If the total income of the organization exceeds the maximum amount not chargeable to income tax, it must get its accounts audited.
The tax audit report should be obtained before the due date of filing the Income Tax Return (ITR).

5. File Income Tax Return (ITR-7):

Organizations must file their income tax return in Form ITR-7 annually, irrespective of whether their income is exempt.

6. Renewal of 80G Registration:

The 80G registration is valid for five years. Organizations must apply for renewal at least six months prior to the expiration of the current registration.

7. Restrictions on Use of Funds:

The funds received under 80G must be utilized solely for charitable purposes. Organizations should avoid activities that have a religious or political nature, as these may lead to the cancellation of their registration.

Consequences of Non-Compliance

Not complying with the regulatory framework can impose a penalty as well as harm the business, as:

Monetary Penalties: Under Section 234G of the Income Tax Act, 1961, the failure to file Form 10BD or issue Form 10BE can attract a penalty of ₹200 per day.
Cancellation of 80G Registration: Continuous non-compliance may lead to the cancellation of registration of the organization under Section 80 G of the Income Tax Act 1961.

Common Mistakes to Avoid

Incorrect filing of forms
Inaccurate financial statements
Failure to attach required documents
Incorrect reporting of donations
Not reporting all sources of income
Mismatch of tax paid and deductions
Late filing
Incorrect PAN or TAN
Failure to submit the audit report (if applicable)
Overlooking tax audit provisions
Inconsistent accounting period

Why Choose Kanakkupillai for Section 80G Registration?

Kanakkupillai is a reliable name for NGOs, trusts, and charitable institutions looking for smooth and professional assistance in obtaining registration under Section 80G of the Income Tax Act, 1961. We provide:

Complete Support for 12A Registration: We handle the entire process from drafting the application and collecting supporting documents to filing with the Income Tax Department and responding to any follow-up queries. Everything is managed under one roof with accuracy and efficiency.
Expert Guidance on Legal Compliance: Our team has in-depth knowledge of tax laws and ensures your organization meets all the eligibility criteria for 80G registration.
Customized Solutions: Whether you are a trust, society, or non-profit company, we tailor the application process to fit your organizational structure and activity profile.
Timely Filing and Error-Free Documentation: We take care of timely submissions and accurate paperwork, which helps you avoid delays or rejections due to minor mistakes or missing information.
Confidential Handling of Your Data: All your trust deeds, financials, and legal documents are managed with strict confidentiality using secure systems and experienced professionals.
Transparent Fees: We believe in fair pricing. You get clear cost estimates upfront, with no hidden charges throughout the process.

Frequently Asked Questions

What is Section 80G of the Income Tax Act, 1961? +

Section 80G allows taxpayers to claim deductions for donations made to eligible charitable organizations. Depending on the organization and the cause, the deduction can range from 50% to 100% of the donated amount.

Who is eligible to claim deductions under Section 80G? +

Individuals, Hindu Undivided Families (HUFs), companies, and Non-Resident Indians (NRIs) are eligible to claim tax deductions for donations made to approved charitable organizations under Section 80G.

What are the types of organizations eligible for 80G registration? +

Charitable organizations, including trusts, societies, and Section 8 companies, that are registered under Indian laws and work for social causes like education, healthcare, and welfare, can apply for 80G registration.

Is 80G registration mandatory for organizations to receive donations? +

While it is not mandatory, 80G registration is highly beneficial for organizations as it enhances credibility, attracts donations, and provides tax benefits to donors. It is also required for receiving corporate social responsibility (CSR) funds.

What is the validity of an 80G registration? +

Previously, 80G registration was granted for perpetuity, but now, under the Finance Act, 2020, it is valid for five years. Organizations must apply for renewal six months before the expiration of their current registration.

Can donations made to all charities qualify for tax deductions under Section 80G? +

No, only donations made to organizations registered under Section 80G of the Income Tax Act are eligible for tax deductions. These organizations must meet certain criteria, such as being non-profit and working for public welfare.

What documents are required for 80G registration? +

Documents such as the application form (Form 10A), registration certificate, trust deed or memorandum of association, PAN card, financial statements, activity report, and donor details are required for 80G registration.

What is the consequence of non-compliance with 80G regulations? +

Failure to comply with Section 80G regulations can lead to penalties, cancellation of registration, and legal repercussions. Non-compliance, such as not filing necessary forms or failing to issue receipts, may result in a ₹200 daily fine.