- 80G Certificate for Individuals
- Eligibility criteria for availing tax saving under 80G Certificate
- Percentage of contributions eligible for a tax deduction
- Documents Required
- Payments Eligible
- 80G Certificate for NGOs
- How to apply for the 80G certificate
- Documents Required
- Issue of Certificate
- Eligibility for 80G certificate
- Benefits to the organization
80G Certificate for Individuals
80G Certificate helps you to exempt yourself from paying taxes to the government partly or fully. It became a part of the law book in 1967-68 and it still holds an important part in saving taxes. You get tax exemption on your taxes if you are making donations to:
- Charitable trusts
- Section 8 companies
- Organizations that are registered to offer leverage from paying taxes.
The benefit that a donor avails by donating to the organizations with NGOs and companies registered under Section 8 is that he gets a tax exemption of up to 50% of his donation. You can avail of our services for the registration of section 8 companies.
You can also read: 12A and 80G registeration
Eligibility criteria for availing tax saving under 80G Certificate
- A person who makes a donation is entitled to avail tax exemption under 80G.
- Donations made to listed charitable trust and organizations only qualify for deduction u/s 80G.
If you are giving charity to a private organization that is not registered under 80G Certificate. Or if you are donating to an organization that helps to fund political parties then you are not eligible to avail the tax saving under 80G Certificate. That amount will be included under the taxable amount.
Percentage of contributions eligible for a tax deduction
- 80G Certificate does not include all the funds. If the contributions are made to listed firms then you are eligible for the 100% exemption from tax payment.
- Whereas others are only eligible for a 50% exemption.
- Donations made to NGOs or any other organization which is not registered under 80G certificate then you are not eligible for availing the tax exemption.
A stamped receipt is required for claiming the tax deduction under the 80G certificate. The receipt should be issued by the recipient trust and it is mandatory. While filing for the tax you have to show the receipt for tax exemption. Without this slip, you will not be eligible for the tax deduction. The slip should have the stamp of the organization’s name, date, and the pan card number.
The receipt should contain the registration number of the 80G certificate. if you are not able to locate the registration number on the receipt you can ask the organization for the same as you will be required to have it during the tax filing with other documents.
The donations made for 100% relief from the tax, a form 58 is also important from the organization. Form 58 comprises the details of the amount that was authorized as well as the amount that was collected.
- Donations made as a gift do not help you to avail of the tax exemption. Donations made during natural disasters like floods, earthquakes, etc do not include in 80G certificate.
- the donations made in cash or cheque are qualified for the tax exemption.
- The donation can be deducted from the salary of the person also and the employer should give the donation slip. then you can have the tax relief.
80G Certificate for NGOs
How to apply for the 80G certificate
The 80G certificate is given to the Not-for-Profit Organizations which are established for the betterment of different sections of the society. It is granted by the income tax department to them. It helps the NGOs to get donations and helps the donor to avail the tax exemption on making donations.
The companies which have 12A certificate are eligible for the application of 80G certificate. Only the NGOs and not for profit Organisations are eligible for the acquirement of the 80G certificate.
The company has to fill the 10G form first with the record of the last one to three years activity. The audited statement for the last three years is also attached, in some cases audited statement is required from the date of establishment also.
The application for the 80G certificate can be done online on the income tax department site. After the scrutinizing of your application the income tax department officer pays a visit to your premises.
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).
Issue of Certificate
After the income department officer pays a visit to the premises and he finds everything OK he can give you the certificate. The commissioner can pass a written order and the organization can have the 80G certificate effective immediately. The commissioner can also demand more documents from the organization.
Eligibility for 80G certificate
All the NGOs and organizations are not eligible for the application for an 80G certificate. Following are the rules for applying for the 80G certificate :
- As a non-profit organization, if the entity is involved in any business/financial transactions which do not account for donations alone, you might have to segregate it. If not, your 80G certification request will be rejected.
- The donations received by the organizations should not be used in any other activity. Even within the organization, there should be a proper account prepared for the expenses made from the donations.
- Any NGO/organization which is involved in any religious preaching or supports any particular religious group is not eligible for applying for the 80G certificate.
- Proper accounting should be done and a proper accounting book should be maintained for the proof.
Benefits to the organization
- The 80G certificate not only provides tax benefits to the donor but also the not for profit organization.
- The organization also gets tax relief benefits from the government.
- The organization can get up to 10% tax exemption benefit on the gross income generated through donations and funds.
- The main role of the 80G certificate is to give benefit to the donors and help them to get a 10-50% tax exemption.
The objective of the 80G certificate is to encourage more donors and more donations to come to such organizations. The benefit that a donor avails by donating to the organizations with 80G and NGO Registration is that he gets a tax exemption of up to 50% of his donation. The donor is allowed to deduct these donations from their Gross Total Income.
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