Registration Under Section 12A of the Income Tax Act, 1961

Certain Exemptions has been provided under the Income Tax Act to the NGOs working for charitable purpose registered under section 12A.

The difinition of the chartable purpose is given in section 2(15) of the act.

In order to claim the exemption under section 11 and 12 of the income tax act, registration under section 12A is a pre condition.

There is a myth regarding the exemptions available to the NGOs under the income tax act, though an ngo is recognized as an ngo when its registered as a Trust, Society or a Company under section-8, the exemptions under the income tax act is available only in case the ngo is registered under section 12A of the income tax act as well.

Following benefits will be available to an ngo registered under section 12A of the income tax ac:

  1. While computing the income of the ngo, the income applied for the charitable purposes in India will be to be deducted from the income of the ngo.
  1. The ngo can accumulate or set aside income not exceeding 15% of the income of the ngo to be applied for charitable or religious purpose in India
  1. Deemed application of income under section 11(2) will not be included in total income.
  1. Verious organizations give grants to the NGOs preferably to the NGOS registered under setion 12A
  1. The NGOs registered under section 12A are exempt from Goods and Service Tax provided the services provided by the NGO must be for a charitable cause.

In the light of the above mentioned benefits available to an ngo registered under section 12A, it becomes important that an ngo must get registration under section 12A in order to avail the above mentioned benefits.

The step by step procedure for getting the registration under section 12A is as mentioned below:

  1. An application in the prescribed form (Form 10A according to Rule 17A of the Income Tax Act, 1962) shall be made to the concerned Commissioner of Income Tax (Exemptions)
  1. Along with the duly filed application following documents shall be submitted:
  1. Copy of evidence of creation of the NGO along with Memorandum and Rules and Regulations
  2. PAN of the NGO

iii. Address Proof of the NGO

  1. PAN and address proof of the managing trustee
  2. Copy of financial statements of the NGO for last three years
  3. A notes clarifying the activities carried out by the NGO in the past

Time Limit for disposal of application for registration under section 12A

As per section 12AA(2) every application for registration under section 12A must be disposed off before the expiry of six months from the end of the month in which the application was received.

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