80G Registration in Bihar– An 80G Certificate is issued by the Income Tax Department to a non-governmental organization (NGO) such as a charitable trust, or a Section 8 Company. The 80G Certificate is granted to encourage the donors to donate funds into such non- profit organizations. Furthermore, the donor gets a tax exemption of 50% when they make donations to such organization, as they become eligible to deduct such amount from their Gross Total Income. Additionally, in order to avail the exemption, the donor needs to attach the stamped receipt of the donation made. Such a receipt must contain the donor’s name, date of donation, and PAN of the organization.
80G registration in Bihar, India is a legal process that allows donors to claim tax deductions for their donations to eligible non-profit organizations (NPOs). This registration is issued by the Income Tax Department of India to NPOs that meet certain criteria and fulfill the legal provisions for 80G registration.
Meaning and Definition:
80G registration refers to the registration of a non-profit organization under Section 80G of the Income Tax Act, 1961. This registration allows donors to claim tax deductions on their donations to the organization.
The provisions related to 80G registration in Bihar are governed by the Income Tax Act, 1961, and the Income Tax Rules, 1962. The provisions state that an NPO must apply for 80G registration to be eligible for tax deductions.
The process for 80G registration in Bihar is as follows:
- Obtain 12A registration for the organization
- Prepare the necessary documents, such as the registration certificate, PAN card, and audited financial statements
- Apply for 80G registration by filing Form 10G with the Income Tax Department
- Attach the necessary documents, such as the PAN card, audited financial statements, and the organization’s registration certificate
- Submit the application online or in person at the Income Tax Department office
The main advantages of obtaining 80G registration in Bihar are:
- Increased credibility and transparency of the organization
- Ability to attract more donors, as they can claim tax deductions on their donations
- Enhanced visibility and recognition of the organization
- Increased chances of obtaining corporate funding
The disadvantages of obtaining 80G registration in Bihar are:
- The NPO must comply with certain regulations and guidelines set by the Income Tax Department
- The registration process can be time-consuming and costly
- The NPO may be required to maintain certain records and file regular tax returns
The cost involved in obtaining 80G registration in Bihar includes the following:
- Professional fees for preparing the necessary documents and filing the application
- Government fees for filing the application and obtaining the registration certificate
- Other expenses, such as notarization and stamp duty
The time involved in obtaining 80G registration in Bihar can vary depending on various factors such as the completeness of the application and the workload of the Income Tax Department. Typically, it takes around 2-3 months for the Income Tax Department to process the application and issue the registration certificate.
The documents required for 80G registration in Bihar are as follows:
- PAN card of the organization
- Registration certificate of the organization
- Audited financial statements for the past three years
- Memorandum of association and articles of association
- Board resolution authorizing the application for 80G registration
- Details of the activities carried out by the organization
- Copy of the communication from the Income Tax Department granting 12A registration
Note: The above information is based on the knowledge cutoff of 2021-09 and may be subject to change in the future. It is advisable to consult a legal or financial professional for the latest information and guidance.
80G Registration comes under section 80G of the Income Tax Act and provides benefit to the donor of an NGO whereas section 12A Registration will assist an NGO to get an organisation income exempted from tax.
The various donations specified in section 80G are eligible for a deduction of up to either 100% or 50% with or without restrictions.
Certain tax deductions can be claimed by submitting proof of donations to your employer and in some other cases donations can be claimed by the individual while filing tax return.
Finance Act 2017 amended section 80G to provide that no deduction shall be allowed under section 80G in respect of donation of any sum exceeding Rs 2000 unless it is paid by any other mode.
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 has certain provisions, which offer tax benefits to the “donors”. All NGO’s should avail the advantage of these provisions to attract potential donors. Section 80G is one of such sections.
If an NGO gets itself registered under section 80G then the person or the organization making a donation to the NGO will get a deduction of 50% from his/its taxable income. The NGO has to apply in Form No. 10G As per Annexure 29 to the Commissioner of Income Tax for such registration. Normally this approval is granted for 2-3 years.
An application for fresh registration under section 80G will be given to Principal Commissioner or Commissioner. A provisional registration for 3 years will be given to organizations. The registration once granted shall be valid for three years from the Assessment Year from which the registration is sought. Application for renewal of such new registration needs to be submitted
– at least six months prior to the expiry of validity period or
– within 6 months from commencement if activities,
whichever is earlier.
The provisional registration so granted shall be valid for a period of 3 years and hence needs to be renewed at the end of the above mentioned timelines. The registration so renewed shall be valid only for 5 years and needs to be renewed at the end of each 5 years.
Procedure for 80G registration in Bihar:
- a) Log on to the E-filing portal of IT department vide https://www.incometaxindiaefiling.gov.in/home
b) Go to “Income Tax Forms” under e-File tab.
c) Select the Form Name as “Form 10A” and relevant Assessment Year from the drop down list.
d) Select the option of “Prepare and Submit Online” in submission mode.
e) Fill in the details as required in the form and attach the required and applicable attachments.
f) Submit the form using digital signatures or EVC as required while return filing.
What are the Documents Required for the 80G Registration?
The following documents are required for 80G registration is as follows:
- MoA and Registration certificate in case of Section 8 companies and Societies and a Trust Deed in case of a Trust
- No objection certificate from the owner of the property where the registered office of the Institution is situated
- Form 10G
- A copy of the PAN of the NGO
- Copy of Utility Bills such as Electricity bill, water bill or House Tax Receipt
- A list of the donors along with their address and PAN
- The documents related to Income Tax Returns and the Book of Accounts of the past three years
- The list of the welfare activities being carried out & the progress report of the last three years
- A detailed list of the Board of Trustees
- Original RC, MoA, or Trust Deed.
Compliance Requirement under Section 80G
As per Section 80G, an applicant of the 80G registration must adhere with these prescribed requirements:
- Only a registered society, public charitable trust, and reputed educational institution can apply for the certificate of 80G. Moreover, if the Government has funded an institute, that can also enroll for 80G registration.
- The institution or trust which applies for the 80G certificate must be duly registered under Section 25 of the Companies Act, Societies Registration Act, 1860; or any other similar Acts.
- The applicant of NGO certificate should not belong to any religion or cast based and creeds based activity.
- The registered institution/trust must not hold any income which isn’t exempted.
- The respective institution or trust should only employ the donation funds for charitable purposes.
- In case the applicant indulges in other businesses, then he needs to maintain a separate account. Thus the received donations do not get merged with the savings of any other kind.
- The applicant should have kept an appropriate record of annual returns, bookkeeping, and accounting before he applies for the 80G certificate.
- Once the applicant procures the certificate, he will receive a receipt that must ensure timely renewal of the certificate. Thus, alerts the applicant to renew it for availing the available tax benefits.
CONDITIONS TO BE FULFILLED UNDER SECTION 80G
For approval under section 80G the following conditions are to be fulfilled:
- i) the NGO should not have any income which are not exempted, such as business income. If, the NGO has business income then it should maintain separate books of accounts and should not divert donations received for the purpose of such business.
- ii) The bylaws or objectives of the NGOs should not contain any provision for spending the income or assets of the NGO for purposes other than charitable.
iii) The NGO is not working for the benefit of particular religious community or caste.
- iv) The NGO maintains regular accounts of its receipts & expenditures.
- v) The NGO is properly registered under the Societies Registration Act 1860 or under any law corresponding to that act or is registered under section 25 of the Companies Act 195
The most important requirement for getting 80G registration is to get registered under Section 12A. After that:
- The application is Form 10G to the Income Tax Commissioner,
- The application is to be enclosed with the following documents:
- Registration Certificate and MOA/Trust Deed
- No Objection Certificate (NOC) from the Landlord (where the registered office is situated),
- Copy of PAN card of the NGO,
- Address Proof, as in the copy of Electricity Bill/House tax Receipt/Water Bill,
- Proof of the welfare activities carried out & Progress Report since incorporation or else, last 3 years,
- List of governing body board of trustees members with their contact details
- The Statement of Accounts, Balance Sheet, Income Tax Return documents since incorporation or else, last 3 years,
- List and details of donors, such as their address and PAN,
- Copy of Registration u/s 12A or copy of notification issued under section 10(23)or section 10(23C).
On receipt of the application, the Tax Commissioner will scrutinize the details. He may ask for some additional documents or information. Once satisfied, he may pass an order in writing registering the Trust/Institution under Section 80G of Income Tax Act. If not, he may reject the application.
The time limit by which the commissioner has to pass an order, of either approval or rejection, shall not exceed 6 months from the end of the month in which such application was made.
In calculating the is period of 6 months, any time wasted by the applicant by not complying with the directions of the Commissioner would be excluded.
Some additional details on 80G registration:
- Eligibility criteria: To be eligible for 80G registration in Bihar, the non-profit organization must be a trust, society, or a company limited by guarantee. Additionally, the organization must be involved in charitable activities such as relief of the poor, education, medical relief, preservation of the environment, or promotion of sports.
- Validity of registration: The registration under Section 80G is valid for a period of 5 years, after which the organization must apply for renewal. The renewal process is similar to the initial registration process, and the organization must provide updated financial statements and other necessary documents.
- Tax deduction limits: The tax deduction available to donors under 80G varies depending on the type of donation and the donor’s tax bracket. Donors can claim a deduction of up to 50% or 100% of the donated amount, subject to a maximum limit of 10% of their gross total income.
- Benefits for the organization: In addition to attracting more donors, 80G registration can also help the organization secure government grants, receive support from corporate social responsibility initiatives, and improve its overall financial stability.
- Importance of proper documentation: As with 12A registration, the 80G registration process requires the submission of various documents, such as audited financial statements, PAN card, and registration certificate. It is essential for the organization to ensure that these documents are properly prepared and filed, as any discrepancies or errors can lead to the rejection of the application.
- Professional assistance: Due to the complexity of the registration process and the importance of proper documentation, it is advisable for organizations to seek the assistance of a professional, such as a chartered accountant or a lawyer, who has experience in handling 80G registration applications.
Overall, 80G registration is an essential requirement for non-profit organizations in Bihar that wish to attract more donors and improve their financial stability. By fulfilling the eligibility criteria and following the proper procedures for registration, organizations can ensure that they comply with the legal provisions and achieve their charitable objectives effectively.