How an NGO in India is eligible for tax exemption

The advantages of NGO registration in India are numerous. The income tax rebate received under Sections 12a and 80g serves as the fundamental rationale. NGOs that have received 12a registration are eligible to apply for an exemption from the income tax division. Donors provide more money to NGOs that have earned an 80g certification. If they are not registered, NGOs must pay ordinary tax rates.

Additionally, it becomes difficult to locate benefactors for donations. The registration under Section 12a was a single transaction prior to its cancellation. Starting on April 1, 2021, the registration received in accordance with section 12AB will only be valid for a period of five years. However, a temporary registration is only valid for three years.

All Section 12AB-issued permissions for NGO registration are subject to renewal under the new registration structure. All charities that are already in operation and those that are registered under sections 10(23C), 12a, 12aa, and 80g of the Income Tax Act must apply for registration under the new, amended section 12AB in order to claim tax exemption under sections 11 and 12.

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NGOs are required to have strong regulations in place to ensure efficiency and openness because they collect donations from both businesses and individual donors. While they do their charitable and humanitarian work, the government provides these organisations with a range of tax benefits and deductions.

Why should NGOs in India submit applications for section 12a and 80g registration?

For NGOs, Sections 12g and 80g are extremely important and offer a number of benefits. Here is a list of some advantages:-

(a) An NGO can get tax exemption by registering under Sections 12g and 80g, provided that certain requirements are met.

(b) Only if the NGO gets a certificate under 12a and 80g may the donor or company receiving the gift enjoy tax advantages.

(c) A tax credit of 50% of the contribution amount will be deducted from the recipient's overall income.

(d) An NGO can only receive funds from the government if it is registered under sections 80g and 12a.

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