Section 12A and Section 80g.
An NGO can avail income tax exemption by getting itself registered and complying with certain other formalities, but such registration does not provide any benefit to the persons making donations.
The Income Tax Act 1961 has certain provisions which offer tax benefits to the “donors”.
What is difference between 12a and 80g?
To summarise, registering under the 12A section allows the NGO exemption from tax rates. Failing to do will make them applicable for ITR filling. The 80G section, on the other hand, ensures that a person donating to the NGO can deduct the amount from their taxable income, which leads to more donations.
What is 80g & 12aa certificate?
80G is a certificate that exempts you part or fully from paying taxes, if you have made donations to charitable trusts or section 8 company or organizations that are registered to offer you exemptions from taxes.
What is Form 12a for?
Benefits of 12A Registration
The fund that is used for the charitable or religious purposes is considered to be the income application. The income application is nothing but the expenses used for charitable or religious purposes when calculating the income of the trust. The income received will be free from taxation.
Is 80g mandatory for CSR?
Under section 80G there is no requirement for CSR funding.