12A Registration
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12A Registration
12A Registration is an exemption obtained by NGO from paying Income Tax. NGO having 12A Registration enjoys exemption from paying Income Tax on the surplus of income of the NGO. It is available for all Non-profit NGO.
Hence, it is important for all Non- profit organizations to be aware of Section 12A of the Income Tax Act and obtain the same soon after incorporation of NGO.
Benefits of 12A Registration:
The fund that is used for the charitable or religious purposes is considered to be the income application. The income application is nothing but the expenses used for charitable or religious purposes when calculating the income of the Trust.
The income received will be free from taxation
The accumulation of income,that is considered to be the income application according to section 11(2) will not be included in the total income.
The person registered under this section can avail benefits for accumulating or setting aside income which is not more than 15% for charitable or religious purposes.
Eligibility for 12A Registration:
Only Charitable Trusts, Religious Trusts, Societies and
section 8 company are eligible for 12A Registration.
12A registration is not applicable for private or family Trust.
Documents required:
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