80G Registration
80G Registration is a provision under the Income Tax Act, 1961, allowing donors to claim tax deductions on donations made to eligible non-profit organizations (such as NGOs, charitable trusts, and societies). This tax benefit incentivizes donations, which supports these organizations in fulfilling their charitable missions.
Importance of 80G Registration
- Tax Deduction for Donors: Donations to 80G-registered organizations are eligible for tax deductions, reducing the donor’s taxable income.
- Enhanced Credibility: 80G certification adds credibility to an organization, making it easier to attract donations.
- Increased Funding: 80G tax benefits encourage more individuals and businesses to contribute.
- Eligibility for Corporate Donations: Many corporations prefer donating to 80G-registered entities to benefit from tax deductions.
Eligibility Criteria for 80G Registration
To qualify for 80G Registration, an organization must:
- Operate solely for charitable purposes, including relief of the poor, education, medical relief, and preservation of the environment.
- Not engage in any religious activities (unless the activities provide charitable services without discrimination).
- Be a registered non-profit entity in India (e.g., NGO, trust, or society).
- Maintain its accounts and submit income tax returns annually.
- Not be a profit-oriented business or entity that distributes profits to members or shareholders.
Note: Entities like religious organizations or entities primarily supporting commercial or political activities are not eligible for 80G registration.
Process for 80G Registration
- PAN of the organization
- Registration certificate or trust deed
- NOC from landlord (if operating from rented premises)
- List of the organization’s donors and their PANs
- Financial statements (last 3 years, if available)
Prepare Documentation:
- File Form 10G through the Income Tax Department's e-filing portal.
- Include all supporting documents for verification.
Submission of Application (Form 10G):
- The Commissioner of Income Tax (Exemptions) reviews the application, checks the organization’s objectives, and may conduct an inspection.
Verification:
- Upon successful verification, an 80G Registration Certificate is issued.
- This certificate is valid for five years and must be renewed periodically to maintain benefits.
Approval and Issuance of Certificate:
Tax Benefits with 80G Registration
- Deduction Limit: Donors can claim a tax deduction of up to 50% or 100% of the donated amount, depending on the type of donation and organization.
- Example Calculation:
- Suppose an individual with taxable income of ₹10 lakhs donates ₹1 lakh to an 80G-registered NGO that qualifies for a 50% deduction.
- The donor can claim a deduction of ₹50,000, reducing their taxable income to ₹9.5 lakhs.
- Entity-Specific Rules:
- Deductions under Section 80G are available for donations to eligible NGOs, trusts, and societies.
- The percentage of deduction (50% or 100%) varies based on the type of organization and fund. Government-approved funds like the Prime Minister’s National Relief Fund typically qualify for a 100% deduction.
Documents Required for 80G Registration
- PAN card of the NGO/Trust/Society
- Registration certificate or trust deed
- NOC from landlord if the property is rented
- Details of activities and charitable work performed
- Financial records for the last three years (if applicable)
- List of donors along with their PAN details
FAQ
Frequently Asked Questions
These FAQs cover essential details like eligibility, required documents, process steps, and benefits. It helps clarify common queries about setup, compliance, costs, and timelines.
80G Registration is a certificate that allows donors to claim tax deductions on donations to eligible organizations.
NGOs, charitable trusts, and societies that operate solely for charitable purposes and meet Income Tax Act requirements.
No, religious organizations or entities focusing on religious purposes are generally not eligible for 80G Registration.
The registration is valid for five years, after which it must be renewed.
It is not mandatory, but it enhances the NGO’s credibility and encourages donations by providing tax benefits to donors.
80G certification encourages donations, making it easier for organizations to raise funds and support their mission.
Donors can claim deductions of 50% or 100% on their donated amount, depending on the type of organization and donation.
The organization will lose its tax-exempt status, and donors will no longer receive tax benefits for their contributions.
Yes, corporate donors can also claim deductions under 80G.
No, foreign contributions are covered separately under the FCRA (Foreign Contribution Regulation Act), not under 80G.
Yes, deductions may be capped based on the donor's income and the organization’s eligibility for 50% or 100% deduction.
No, 80G registration is governed by the central Income Tax Act and applies uniformly across India.
Yes, they must file annual income tax returns to maintain their registration and tax-exempt status.
No, GST exemptions are governed separately from income tax exemptions.
Yes, if the NGO violates any provisions, the Commissioner of Income Tax can revoke 80G status.
12A exempts the NGO’s income from tax, while 80G provides tax benefits to donors.
No, it is non-transferable and applies solely to the registered organization.
No, but donors will not be eligible for tax deductions if the NGO lacks 80G registration.
No, only domestic donations qualify under 80G.
Yes, registered organizations must maintain accounts and may be subject to audit.
80G Registration enhances the credibility of non-profit organizations and incentivizes donations by offering tax benefits to donors. For help with the registration process, compliance, and maintaining annual filings, YathraFin can provide expert guidance and support to ensure a successful 80G certification.