Every NGO (trust, society or nonprofit company) is required to get registered with income tax department under income tax act 1961 in order to claim tax exemption for their income. Every NGO should apply for registration from the date of its establishment and get 12A certificate from income tax department. This 12A certificate is known as registration certificate.
CONDITIONS AS TO REGISTRATION OF TRUSTS, ETC.
The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:-
- the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later and such trust or institution is registered under section 12A: Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of section 11 and section 12 shall apply in relation to the income of such trust or institution –
- from the date of the creation of the trust or the establishment of the institution if the Commissioner is, for reasons to be recorded in writing, satisfied that the person in receipt of the income was prevented from making the application before the expiry of the period aforesaid for sufficient reasons;
- from the 1st day of the financial year in which the application is made, if the Commissioner is not so satisfied;
- where the total income of the trust or institution as computed under this Act without giving effect to the provisions of section 11 and section 12 exceeds Rs. 50000 in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the person in receipt of the income furnishes along with the return of income for the relevant assessment year the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed.
DOCUMENTS REQUIRE FOR 12A:
The first step of registration you have to fill a FORM 10A and this form has to be submitted to the commissioner of income tax. If your NGO is established in metropolitan cities like Delhi, Calcutta, Mumbai and Chennai, then you have to produce the FORM 10A to the Director of Income Tax (Exemption), Income tax department office. The application form should be sent in triplicate to the Commissioner of Income Tax along with the following documents:
- FORM—10A for u/s 12A registration
- RC and MOA / Trust Deed (two copy – signed and stamped)
- NOC from Landlord
- PAN copy
- Copies of audited accounts of the institution/NGO since its inception or last 3 years whichever is less.
- Detail of activities since its inception or last three years whichever is less
- Copies of the accounts of last couple of years may also be submitted
- Electricity Bill / House tax Receipt / Water Bill photocopy
- Evidence welfare activities carried out & Progress Report since inception.
- Books of Accounts & ITR, if any, since inception
- Original basic documents of organization, like Trust deed / Bye laws / Rules and Regulations / Memorandum and Articles of Association as per the shape of your NGO- at the time of registration.
Note: Before submitting FORM 10A, please make sure that you have received PAN CARD for your NGO.
After you have produced the above FORM 10A either through registered post with acknowledgement due or directly in the Income Tax office. The Commissioner of Income Tax, on receipt of an application for registration of an NGO, shall call for such documents or information, as he thinks necessary.
While processing such application, the concerned authority normally concentrates on the genuineness of the NGO. Once the genuineness of the activities & creation is established, then it is incumbent upon the authority to pass an order in writing, registering the NGO.
The Income tax officers have the rights to grant or to refuse registration to your application. Also, note that, 12A registration of an NGO shall be cancelled by the Income tax department, if it feels that NGO is not fit as per law at any point of time.
