12A in India: Details and Overview

12A refers to a provision under the Income Tax Act, 1961, that provides tax exemptions to charitable trusts and non-profit organizations in India. The registration under section 12A enables such organizations to receive donations and be exempt from paying income tax on their receipts, provided they meet the necessary conditions.

Eligibility for 12A Registration:

1. Charitable Purpose: The organization must be established for charitable or religious purposes.
2. Non-Profit Status: The organization must be a non-profit entity, meaning any surplus income must be used to further its objectives and cannot be distributed among members or stakeholders.
3. Compliance: The organization must comply with the requirements set by the Income Tax Act, 1961, and follow the prescribed accounting practices.

Benefits of 12A Registration:

1. Tax Exemption: The main benefit is the exemption from income tax on income derived from charitable activities.
2. Donor Benefits: Donors contributing to registered organizations under section 12A are eligible for tax deductions under section 80G, making it attractive for philanthropic individuals and corporate entities to donate.
3. Legal Recognition: 12A registration gives the organization legal recognition and credibility, making it easier to attract donations and grants.

Documents Required for 12A Registration:

1. Certificate of Incorporation/Trust Deed: A copy of the organization's incorporation certificate or trust deed.
2. PAN Card of the Organization: The organization must have a Permanent Account Number (PAN).
3. Audited Financial Statements: Financial records of the organization, including income and expenditure statements.
4. Activities Details: A description of the organization's activities and its charitable objectives.
5. Form 10A: This is the application form for registering under section 12A.

Procedure for 12A Registration:

1. Prepare Documents: Gather all necessary documents including trust deed, PAN, and financial statements.
2. File Application: The application for 12A registration is filed with the Income Tax Department using Form 10A.
3. Verification: The Income Tax Department reviews the application and may request additional documents or clarifications.
4. Issuance of Registration: Upon successful verification, the organization is granted 12A registration, allowing it to claim tax exemptions.

How We Can Help:

We provide comprehensive 12A registration services, guiding you through the entire process of filing the application, preparing the necessary documents, and ensuring compliance with all legal requirements. Let us help your organization become legally recognized for tax exemptions and enhance its credibility for donor funding.