Guide to 80G Certificate & 80G Registration

80G Registration certificate exempts you partially or fully from paying taxes on the donations you have made to any charitable establishment such as a section 8 company or a charitable trust or any other registered organization that offers tax exemption. For example a trust or charitable organisation under section 12 A permits an individual to take benefit under section 80G. However there is a maximum permissible deduction criteria. Under this criterion if the aggregate amount an individual donated exceeds ten percent of the total gross income, then the excessive amount will not be considered and there will be no tax exemption available on that amount.

Eligibility Criteria for obtaining 80G Registration certificate in India

The following are the eligibility criterion for obtaining registration certificate in India:

• The Non-Government Organizations must have a registration under the Act.
• Not valid for Family Trust or Private Trust.
• Non-Government Organization must be a charitable trust or a society registered under the Societies Registration Act, 1860.
• Non-Government Organizations should not have any income created from a business.
• Non-Government Organization has to keep a regular accounts book to record receipts and expenses.
• Any organization working for the benefits of any particular caste or religion is not eligible for registration.
• In the case of income generated from a business, a Non-Government Organization has to keep a separate accounts book. The offerings received by the NGO must not be used for other businesses.

What are the Advantages of obtaining 80G Registration Certificate in India?

The following are the advantages of obtaining registration certificate:

• After obtaining 80G registration certificate, a donor can avail the benefit of tax exemption on the income by providing the receipt of donation.
• The intention behind providing 80G certificate is to encourage people to donate to NGOs, as this certification gives a 50% tax exemption to the donor on the donations made to such NGOs.

Who can avail benefit of tax exemption under section 80G?

• Any individual who makes an appropriate donation is allowed to avail benefit of tax exemption under section 80 G.
• Contributions made to listed organizations and trusts only qualify for deduction under section 80G.
• If an individual makes a donation from his/hers salary and if the receipt of the donation has the name of the employer then he/she can claim tax exemption u/s 80G.
• Donations made by NRI to registered trusts and organization also qualify for tax exemption u/s 80G.

Who cannot avail benefit of tax exemption under section 80G?

• If a donation is made to a foreign charitable organisation or trust, then the donation does not qualify for tax exemption under section 80G.
• If an individual has made donation to one or more political parties then he/she is not allowed to avail tax exemption for such donations.

Compliance Requirements for obtaining 80G Registration

The applicant has to comply with the below specified requirements for obtaining 80G registration certificate:

• The registration application can only be applied by a public registered society, recognized educational institution charitable trust, or Government funded institution.
• The trust or charitable organization applying for the 80G certificate must be appropriately registered under the Section 25 of the Companies Act; or under the Societies Registration Act, 1860 or any other applicable Acts.
• Applicants of the 80G certificate should not symbolize any religion or caste based activity.
• The applicant trust or charitable organization must only use the donated resources for charitable purposes.
• The registered trust or charitable organization must not hold revenue which is not exempted.
• Trust or charitable organization pursuing any other business should maintain a separate account, so that the offerings received are not mystified with other savings.
• The applicant trust or charitable organization has to maintain appropriate annual returns, accounting and bookkeeping prior to applying for the 80G certificate.
• The applicant entity receiving certificate must ensure the timely renewal of registrations and certificates, to receive the benefits of tax exemptions. 

Documents required for obtaining 80G Registration Certificate in India

The following are the required documents for obtaining 80G Registration Certificate:

• A stamped receipt is necessary for claiming tax exemption u/s 80G. The receipt of the donation has to be issued by the recipient trust or charitable organization. The receipt must comprise of the following:
  • Name, PAN Card number and address of the trust or charitable organization the donation was made to.
  • The donated amount must be mentioned in numeric and in words also.
  • Donations that can attract 100% tax exemption should ask for Form 58 from the trust or charitable organization.
    • Form 58 contains the details of the amount that was sanctioned as well as the amount that was collected.
    • The deductions made for 100% tax exemption will be rejected if form 58 is not presented.
• Registration number of the trust under 80G.
  • • It is particularly important to cite the registration number granted by the income tax department u/s 80G. The registration number must be printed on the receipt.
    • The legitimacy of the registration should be legitimate as of the date the receipt is issued.
  • A self-attested photocopy of the registration certificate is necessary too along with the receipt.

Procedure for Obtaining 80G Registration Certificate

Prior to beginning the registration process, the applicant trust or charitable organization has to make sure that all the necessary documents required for obtaining 80G registration certificate are collected.

The applicant trust or charitable organization has to follow the below-mention steps to obtain registration certificate:

• The applicant trust or charitable organization has to submit registration application to the Commissioner of Income Tax Department.
• After that, the concerned authorities of the Income Tax Department will conduct an inspection, and the applicant trust or charitable organization is required to submit the documents.
• If the authorities of the Income Tax Department are not pleased with the registration application or the applicant entity has missed anything in the registration application or the submitted documents are not enough, then the concerned authorities can ask for additional documents.
• After the authentication of the Non-Government Organizations’ office and all the documents is finished, and the authorities of the Income Tax Department are satisfied, the Income Tax Commissioner will grant the 80G Registration Certificate.

Conclusion

A trust or charitable organisation under section 12 A permits an individual to take benefit under section 80G. However there is a maximum permissible deduction criterion. 80G Registration certificate exempts you partially or fully from paying taxes on the donations you have made to any charitable establishment such as a section 8 company or a charitable trust or any other registered organization that offers tax exemption.