12A And 80G Registrations

Get Started – From Rs. 28,000/-

Charitable Trusts are exempt from Income Tax. However, this is not automatic. One needs to apply to Income Tax Office to get the exemption from tax on trust’s income under section 12A. Income of a Trust is exempted only if the Trust has 12-A registration. All income shall not be taxable after 12-A registration. This is one time registration. If the Trust is not registered, income tax is payable on surplus during the year.

Benefits of 12A Registration:-

• Income will be exempted for taxation.
• Benefits in taking grants from Government and other agencies.
• Benefit in FCRA registration.

80G – TAX Exemption:

A Trust can avail income tax exemption by getting itself registered under Section 12A and complying with certain other formalities, but such registration does not provide any benefit to the persons making donations. The Income Tax Act has certain provisions which offer tax benefits to the “donors”. All Trust’s should avail the advantage of these provisions to attract potential donors. Section 80G is one of such sections.

Registration Under Section 80G:

If a Trust gets itself registered under section 80G then the person or the organization making a donation to the Trust will get a deduction of 50% from his/its taxable income. The Trust has to apply in Form No. 10G to the Commissioner of Income Tax for such registration. This approval needs to granted or rejected within 6 months from the date of applying for the same

Conditions to be Fulfilled Under Section 80G:

For approval under section 80G the following conditions are to be fulfilled:

• The TRUST should not have any income which is not exempted, such as business income. If, the TRUST has business income then it should maintain separate books of accounts and should not divert donations received for the purpose of such business.
• The bylaws or objectives of the TRUSTs should not contain any provision for spending the income or assets of the TRUST for purposes other than charitable.
• The TRUST is not working for the benefit of particular religious community or caste.
• The TRUST maintains regular accounts of its receipts & expenditures.
• The TRUST is properly registered under the Societies Registration Act 1860 or The Indian Trusts Act, 1882 or under any law corresponding to that act or is registered under section 25 of the Companies Act 1956.