When an NGO organization gets registered with Income Tax department, to claim tax exemption for the income, it gets the 12A certification.
From the Date of establishment of a nonprofit NGO organization like trust, society or nonprofit company, it should apply for registration and submit Audit Reports for the past three years or as may be available.
To get registered with Income Tax Department, Nonprofit NGO has to fill a form named FORM 10A and produce it to the Commissioner of Income Tax at the Income Tax Department office in the area your NGO is located. If your NGO is established in metropolitan cities like Delhi, Calcutta, Mumbai and Chennai, then you have to produce the FORM 10A to the Director of Income Tax (Exemption) at the Income Tax Department office. Before submitting FORM 10A, please make sure that you have received PAN CARD for your nonprofit NGO organization.
When you produce the FORM 10A to the above Income Tax Department, you should also enclose the proofs and copies of the following:
- Original basic documents of organization, which shows the conception of NGO should be enclosed, like trust deed / bylaws / Rules and Regulations / Memorandum and Articles of Association as per the NGO nonprofit organization.
- Two copies of the accounts of three previous years should be enclosed. If the NGO was not in existence in any of the three prior years, copies of the accounts for minimum years may also be submitted.
After you have produced the above FORM 10A either through registered post with acknowledgement due or directly in the income tax office, the department will verify your application for fitness towards registration. It also monitors your organization directly in person to know the genuinity of your NGO organization.
The Income tax officers have the right to grant or to refuse registration to your application. If the Income tax office gets satisfied with your proper documents and genuinity of your organization, then you will be certified.
Even a 12a certified NGO organization, shall be rejected or grant cancelled by the Income tax department, if it feels your organization is not fit as per law at any time.