Section 80g consultancy services

Crystal Consultancy is a singleton firm which offers services in ngo registration, ngo amendment, 12a and 80g registration, foreign funding registration of non government organizations which is called FCRA(Foreign Contribution Regulation Act) along with website designing, website development, search engine optimization and social media optimization. It is indeed the complete solution for NGOs for services like 80g registration. There were times when we had to rush to income tax offices for physical hearing where we had to show bills in name of ngo, photographs of events of ngos, annual reports, balance sheets, bank statements of our organization in order to get approval for 12a and 80g of Income Tax Act, 1961. Earlier, the time duration was 6 months from the date of filing of the application. The covid has drastically changed everything. After covid, the system has been centralized which means that the certificate will be issued by income tax office, Bangalore subject to provisional registration only. If we wish to get renewal certificate for 80g deduction or 12a, income tax authorities are calling the ngo representatives for physical appearance along with the all the evidences of activities in the last 3 years. Even central and state ministries are liable to pay taxes. Thousands of ngos apply for grants. Ministries shortlist those ngos which are having 80g certificate. By doing so and issuing them sanction letters, they also get tax benefits. As you may be well aware that the donors donating to ngos possessing 80g registration, donors get 50 percent tax benefit out of the donated amount. This means that donors will claim their 80g deduction while filing their income tax returns. That 50 percent donated amount will be adjusted in the taxable income of the donor. The donors must take the receipt from those ngos which should bear 80g and 12a registration number along with the pan number and registration number of the organization. On the another hand, the non government organization shall note the pan number and aadhaar card number of the donor for its records. With reference to income tax notifications, nowadays, ngos are supposed to file Form 10BD mentioning the donor details who claim tax exemption under section 80g. In this form, various details of the donor like address, pan number and the donation amount has to be filled. Once the Form 10BD has been filed by the ngo, the ngo can download Form 10BE certificate and provide the same copy to the donors. This has been done by the income tax department in order to avoid claiming of fake exemptions and bring more transparency to the system. An amount upto 2000 rupees can be accepted via cash but the amount exceeding 2000 rupees must be taken online in bank account of ngo or through cheque or demand draft in favour of the organization.

What are tax exemptions

Tax exemptions are an important part of the taxation system and have been used extensively by governments around the world. They can provide individuals and businesses with a way to reduce their overall tax burden and gain financial benefits. Tax exemptions are granted for various reasons, ranging from providing relief to those in need, to encouraging investment in certain industries. Tax exemptions help the government run smoothly. The government needs to spend a lot of money on different services, and it can’t afford to pay for every single service out of tax revenue. If there were no tax exemptions, the government would have to raise taxes on everything else. In addition, it might not be able to provide some services because it would not have enough money. Tax relief is not a gift the government gives to citizens. It is a service that the government provides to its citizens. While tax exemptions can be beneficial, they also come with a set of complexities that must be understood before taking advantage of them. Infact, tax exemptions are tax breaks granted to certain individuals, businesses and organizations. They allow taxpayers to reduce the amount of their income that is subject to tax, and in some cases, avoid paying taxes altogether. Tax exemptions are given for a variety of reasons, but most fall into one of the following categories: Economic or Industrial Tax Exemptions. These exemptions encourage investment in certain industries and activities by giving investors breaks on their income taxes. Exemptions are like charitable and religious tax exemptions. These exemptions allow taxpayers to deduct contributions made to charities, churches, schools and other non-profit organizations from their taxable income. 

Who is eligible under section 80g?

Section 80g allows for tax exemption on donations to certain organizations. The following are the eligible organizations under this section:
Charitable institutions or trusts
Any other institution or trust declared by the government from time to time, and
An institution of a state government.

Donations that can be claimed as deductions under section 80g

Under Section 80g, you can claim a deduction for any donation made to eligible organizations. Here are the types of donations that can be claimed as deduction under Section 80g:
Donations made to charitable organizations such as educational institutions, hospitals, and other research organizations.
Donations made for research purposes in the fields of science and technology.
Donations made for social welfare schemes. Donations made to political parties.
Donations made for the construction of school buildings and for other charitable purposes.
Donations made for the construction of a hospital or a medical research institution.
Donations made by companies in order to promote sports.
Donations made by companies to promote art and culture in the country.
Donations made in order to foster national integration. Donations made in order to prevent cruelty against women or children.
Donations made to a National Sports Development Fund and other similar funds.

What is 80gga?

The Income Tax Act 1961 of India has numerous sections and subsections concerning the taxation of citizens. One such section is Section 80gga, which deals with the deduction from taxable income for certain payments made by an individual or a Hindu Undivided Family (HUF). Section 80gga of the Income Tax Act 1961 is a section of the Income Tax Act which allows an individual, HUF or company to claim a deduction from their taxable income for any amount contributed by them, directly or indirectly. It provides for a deduction in respect of certain donations for scientific research or rural development. The entities eligible for this deduction include:
A public sector company or a local authority or an association or institution approved by the National Committee for Promotion of Social and Economic Welfare.
An association or institution approved by the National Committee for carrying out research in social science or statistical research.
An association or institution approved by the National Committee for carrying out research in any other subject.
The amount of deduction under section 80GGA is equal to the amount of donation made which 100%, subject to a maximum limit of Rs. 10,000 in cash. There is no limit of donation made via cheque or online. Additionally, to claim the deduction, the taxpayer must obtain a certificate from the entity to which the donation is made, stating that the donation has been used for scientific research or rural development. It is important to note that this deduction is not available to taxpayers who are claiming a deduction under section 80G or section 80GGC of the Income Tax Act.

Benefits of tax system in India

There are several benefits of the tax system in India, some of which are:
Revenue Generation: The tax system in India is a vital source of revenue for the government. It helps the government to fund various public welfare programs and infrastructure projects.
Redistribution of Wealth: Through the tax system, the government can redistribute wealth by imposing higher taxes on the rich and lower taxes on the poor. This helps to reduce income inequality and promote social justice.
Incentivize Savings and Investment: The Indian tax system offers several incentives to encourage savings and investment. For instance, certain types of investments such as Public Provident Fund (PPF), National Pension System (NPS), and tax-saving fixed deposits are eligible for tax deductions.
Encourages Compliance: The Indian tax system has several penalties and fines for non-compliance, which encourages taxpayers to file their taxes on time and accurately. This helps to reduce tax evasion and increase revenue collection.
Encourages Business Development: The tax system in India also offers several incentives to encourage business development. For example, tax holidays are granted to new businesses in certain sectors, and research and development expenses are eligible for tax deductions.
Supports Economic Growth: The tax system in India plays an important role in supporting economic growth by providing a stable and predictable environment for businesses to operate. This helps to attract foreign investment and encourages domestic businesses to expand.
Overall, the tax system in India serves as an essential tool for the government to promote economic growth and social welfare.

You can approach us if you wish to get your ngo registered under section 12a and 80g of income tax act 1961 for getting tax benefits. We have a team of highly experienced professionals who can comprehend your issues and resolve it in a quick span of time. You can also whatsapp at 9711105597.