When the nonprofit NGO organizations have registered with the income tax department by getting 12A certificate, it shall apply to get the 80g certificate.
The main role of 80g certification is to encourage the donors who donate funds to the nonprofit NGO organization. That is organization hold this 80g certificate to provide tax exemption to the donors who donate their funds and they will get 10% tax exemption on their Gross total income of an accounting year.
Here, people are thinking that they will get 50% of tax exemption before the calculation of their taxable Annual Income. But it's is not in such a way. 50% of amount is calculated in the amount what they have donated to the nonprofit NGO organization. And in that 50% of that donated amount, the donor shall get 10% of maximum tax exemption as per Gross total income of the Donor.
To know how the donations of the donors are exempted under section 80g you shall visit this page.
Now let us see, How to apply for 80g ?. What are the steps to be taken by nonprofit NGO organizations to get this 80g certificate from Income tax department?
To get the 80g certificate nonprofit NGO organization have to fill the FORM 10G and they have to attach the activity report for the past 3 years or the last year with the audited report right from the date of establishment or of the past 3 years. You can download the editable FORM 10G to get registered for 80g approval from income tax department. This process may take several months, to receive the approvals.
1. If nonprofit NGO organization is undergoing with any business, then they have to maintain a separate account and should not mix the donations they receive for social cause.
2. Other than charitable cause the organization or its bye-law should not represent any other causes towards spending of such donation amounts or the assets and incomes of the nonprofit NGO organization.
3. The nonprofit NGO organization shall not be able to apply for 80g if it supports religion based, caste and creeds based activity.
4. The nonprofit NGO organization should have the qualification of registration which might have been registered under Societies Registration act 1860 or registered under section 25 of Companies act 1956.
5. Proper annual returns, accounting, bookkeeping should be in the manner before applying for 80g.
6. If you have already received the 80g certificate, then proper renewal is must to hold such tax benefits.
Income tax department has the power to approve or reject such approval upon disqualification of the nonprofit organization or dissatisfaction found by the department towards the nonprofit NGO organization activities. Please read this before your apply.
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