How to Apply for 12A Registration for an NGO under the Income Tax Act, 1961

12A Registration is a certification granted to a non-profit organization, such as a Trust, Society, or Section 8 Company, by the Income Tax Department of India. It enables the organization to claim tax exemptions on its income, which is a significant benefit for any NGO. Below is a step-by-step guide on how to apply for 12A registration and the necessary documents required.

Eligibility for 12A Registration

• The organization must be registered under the Income Tax Act as a non-profit entity, such as a Trust, Society, or Section 8 Company.
• The NGO must apply for 12A registration within the prescribed time frame (preferably within the first year of its formation). A delay in application would require submission of audit reports for the previous years.

Steps to Apply for 12A Registration

1. Obtain PAN for the NGO Before applying for 12A registration, ensure that your NGO has a Permanent Account Number (PAN) issued by the Income Tax Department.
2. Fill out FORM 10A
   • FORM 10A is the application form required for 12A registration.
   • This form must be filled out and submitted to the Income Tax Department for processing.
   • In case your NGO is located in major metropolitan cities such as Delhi, Mumbai, Kolkata, or Chennai, you will need to submit the form to the Director of Income Tax (Exemption) at the Income Tax Department office.
   • If the NGO is located outside these areas, the form is submitted to the Commissioner of Income Tax at the respective Income Tax office.
3. Documents Required Along with FORM 10A, you must submit the following documents:
   • Original documents that evidence the creation of the NGO, such as:
     • Trust Deed (for Trusts)
     • Bye-Laws (for Societies)
     • Memorandum and Articles of Association (for Section 8 Companies)
   • Audit reports of the last three years of operation. If the NGO has been established recently and hasn’t completed three years, submit the available audit reports for the years of operation.
     • If the NGO was not in existence for three years, a minimum of the available years of accounts should be provided.
4. Submission Process
   • After completing FORM 10A and gathering the required documents, submit the application to the relevant Income Tax office, either via registered post with acknowledgement due or in-person.
   • The department will review your application to ensure that the NGO is a genuine non-profit and adheres to the provisions of the Income Tax Act.
5. Inspection and Approval
   • The Income Tax Department may conduct an inspection or inquiry to verify the legitimacy of the NGO and the accuracy of the submitted documents.
   • Based on the verification, the department will decide whether to grant 12A registration to the NGO. If the application is approved, the NGO will receive the 12A certificate, which is essential for tax exemptions.
6. Rejection or Cancellation
   • Even if your NGO is granted 12A registration, it is subject to cancellation if the Income Tax Department later determines that the NGO does not meet the necessary legal criteria.
   • The department has the authority to revoke the 12A certification if it finds any violation of rules.

Key Considerations

• Timeliness: Ensure that you apply for 12A registration at the earliest opportunity, ideally within the first year of establishment, to avoid the need for additional documentation such as audit reports for previous years.
• Audit Compliance: Regular audit reports for the NGO must be maintained as part of compliance with legal and tax requirements.
• Compliance with Income Tax Act: The Income Tax Department has the right to reject or cancel the registration if it finds that the NGO is not following the prescribed legal framework.

Conclusion

Registering your NGO under 12A of the Income Tax Act, 1961 is crucial for securing tax exemptions on its income. By following the above steps and ensuring compliance with the required documentation and procedures, your organization can benefit from the tax privileges and continue its operations for charitable purposes.