Friday 31 March 2023
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Tax Exemption – 80G Certification of NGO


Tax Exemption - 80G Certification of NGO

How to apply for 80G certification?

Nonprofit NGO shall fill FORM 10G of Income tax department for approval of 80G to provide tax exemption to donors.

When the nonprofit NGO organizations have registered with income tax department by getting 12A certificate, they become eligible to get 80G certificate.

The main role of 80G certification is to encourage the donors to donate funds to the nonprofit NGO organization i.e. when the organization holds this 80G certificate it can 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 think that they will get 50% of tax exemption before the calculation of their taxable Annual Income. But it is not such. 50% of amount is calculated in the amount what they have donated to the nonprofit NGO organization. And from 50% of that donated amount, the donor shall get 10% of maximum tax exemption as per Gross total income of the Donor.

When you apply for 80G you should check yourself for the fitness of 80G approval under the following factors:

  1. If nonprofit NGO organization is undergoing 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 bylaw 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 eligible 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 available 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.

Tax Exemption – 80G Certification of NGO

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