12A and 80G are the two registrations granted by the income Tax Department to NGOs to allow tax exemptions and permitting deduction on donations by the donors.
A 12A and 80G registered NGO is more acceptable to receive prosperous funding and various tax reliefs.
Benefits of 12A & 80G Registration:
£ More capital is allowed for charitable activities through tax exemption over NGO income.
£ Funds and Grants are permitted from recognized agencies, Government and international sources.
£ Only 12A and 80G registered NGOs are permitted to accept international funding with exemptions available under Foreign Regulation Act 2010 or FCRA.
£ Attracts more donors expanding the scope of fulfilling the NGO objectives.
£ More Operational exposure and status value when the NGO is registered and has 12A and 80G Certificates.
£ Both are one-time registrations and valid for NGOs lifetime.
Eligibility for 12A and 80G Registrations:
£ Organizations have not generated any income from business,
£ Is either a charitable trust or registered society or Nidhi Company registered under Section 8 of the Companies Act,
£ Organizations should use their assets and income only for charity,
£ Maintains regular books of accounts of receipts and expenses,
£ The trustees or governing body does not derive any undue benefits from funds received,
£ If there is business related income, there should be separate accounts maintained for it and the donations received by the NGO should not be used for such businesses.