12-A Registration

Any organization engaged in charitable, educational, religious, or other not-for-profit activities can apply for 12A registration, including:

• Charitable Trusts (whether public or private)
• Section 8 Companies (non-profit companies under the Companies Act, 2013)
• Non-Profit Societies

Trusts:

• Governed by the Indian Trusts Act, 1882.
• Can be public or private trusts.
• Formed primarily for the benefit of the public (in the case of public charitable trusts).
• Often established to manage assets or wealth for charitable purposes.

Section 8 Companies:

• Governed by the Companies Act, 2013.
• Incorporated with the aim of promoting commerce, art, science, sports, education, research, social welfare, religion, charity, etc.
• Unlike trusts, Section 8 companies are structured like private limited companies but cannot distribute profits to shareholders. All profits must be reinvested into the company's objectives.
• Both Trusts and Section 8 companies are eligible to apply for 12A registration to claim tax exemption on their income.

• Tax Exemption: Once registered under Section 12A, the entire income of the organization used for charitable purposes is exempt from tax.
• Eligibility for Grants: Government and international organizations often require NGOs to have 12A registration before providing grants or donations.
• Attracting Donors: Donors may prefer to contribute to organizations with 12A registration since it indicates a genuine charitable purpose.
• Accumulation of Income: The organization can accumulate or set aside income for up to 5 years for specific charitable purposes without tax implications.

To apply for 12A registration, the organization must submit the following documents to the Income Tax Department:

• Form 10A: Application form for 12A registration.
• Trust Deed or Memorandum of Association (MoA) for Section 8 companies or trust deed for charitable trusts.
• PAN Card of the organization.
• Address Proof of the organization’s registered office.
• Financial Statements: Copies of the financial statements of the last three years (if applicable).
• Bank Account Statements of the organization.
• List of Trustees/Directors: Names and addresses of trustees or directors of the organization.
• Details of Activities: A brief description of the activities undertaken by the organization.