Section 80G and 12AA

Section 80G of the Income Tax Act states the exemption that can be availed by making a contribution towards various relief funds and charitable institutions which can be claimed as a deduction while filing ITR. The donor can avail of the 50% tax exemption after making donations to the NGOs (the amount is to be deducted from their Gross Total Income).

Section 12AA of the Income Tax Act lays the grant to trusts, NGOs, or section 8 companies the facility of availing tax exemption. It further allows the entity to avail various government and government agency's permits of financial support.

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Advantages of Section 80G –

Advantages of Section 12AA –

Eligibility for claiming deduction Section 80G

Eligibility for Section 12AA registration

Documents required for Section 80G registration

Documents required for Section 12AA registration

FAQ (Section 80G and 12AA registration)

What is section 80G of ITA?
What is section 12AA of ITA?

Section 12AA of the Income Tax Act lays the grant to trusts, NGOs, or section 8 companies of a one-time tax exemption. The Tax exemption is levied on the surplus income and does not apply to the entities registered under section 12A.

What are the advantages of registration u/s 80G?

The advantages that are availed after registration u/s 80G are –
Contributor gets Tax Benefits
Contributor willfully donates to trusts and charities to avail the exemption.

What are the advantages of registration u/s 12AA?

The advantages that can be procured u/s 12AA are –
The Contributor gets tax exemption
Procurement of funds from the government becomes much easier
Improves credibility for FCRA registration.

What is the tax benefit listed u/s 80G?

The Contributor gets eligible to avail 50% deduction of the donation amount contributed to registered NGOs.

What is the tax benefit that can be availed u/s 12AA?

Income will be exempted from the taxes after successful registration under Section 12AA.

Can an entity with a profit motive become eligible for section 12AA registration?

No, the organization should not have any kind of profit motive for the activities that are being carried out. In a case where profit is involved, the registration could still be granted if the receipts/revenue from trade activities is not more than 20% of the total receipts.

Can a private trust be eligible for section 12AA registration?

No, the entity should not be private or any type of Family trust. The Entity will become ineligible to register for registering u/s 12AA if it is a private trust.

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