80G/12AA Registration

80G/12AA Registration

When the nonprofit NGO organizations have registered with income tax department by getting 12A certificate, it shall start to get 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 its 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.

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 least year with the audited report right from the date of establishment or of the past 3 years.  to get registered for 80g approval from income tax department. This process may take several months, to receive the approvals.

When you apply for 80g you shall check yourself for the fitness of 80g approval under the following factors.

1. If nonprofit NGO organization is under going 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 byelaw 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 support 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, book keeping should be in 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

The ld counsel of the revenue submitted that under the scheme of the Act and in particular in the provision of Section 12AA, the Department is to satisfy itself not only with regard to genuineness of the trust but also with regard to genuineness of the activities of the trust. He submitted that in this case, the assessee could not file any evidence to prove that the trust was created in the year 1159 AD and was doing charitable activities.

He further submitted that the onus was on the assessee to file evidence that the objects exist in the year 1159 AD and amendments to the objects of the trust were made by the trust with the resolution passed from time to time and credible evidence has to be filed by the assessee trust to prove the same. He submitted that a plain reading of the objects of the trust as detailed in the declaration of the trust dated 29th March, 2011 makes it clear that these could not be the aims and objects of the trust in the year 1159 AD. He submitted that the trust is stated to be created in the year 1159 AD in China and there is no evidence brought on record by the assessee to prove that they have passed a resolution that they have settled in India or are “in exile” in India

He further submitted that the copy of form No.10A, i.e., application for registration u/s 12AA shows that the address of the assessee trust is shown in a chamber in Tis Hazari Court in Delhi, although there was no activity undertaken by the assessee trust in Delhi. He submitted that the 17thKarmapa, the head of the assessee trust has come to India in the year 1974 but has applied for registration in the year 2011 and there was no valid reason for such inordinate delay in applying for registration u/s 12AA.


He submitted that there was a violation of foreign exchange laws by the assessee trust and the assessee has spent Rs. 30.28 lakhs under the head ‘legal expenses’ and violation of the law was clearly against the public policy. He submitted that the 17th Karmapa, as head of the assessee trust, was taking food and clothes and meeting his personal expenses from the resources of the assessee trust and which is in violation of the provision of Section 13. He submitted that the assessee should prove that from where the 17th Karmapa has spent for his personal requirements. He relied on the order of the learned DIT (Exemptions).