12A registration and renewal for NGOs

12A registrations are the income tax exemption registration given by income tax department to NGOs. A Charitable NGO can apply for income tax exemptions certificate 12A, after getting the 12A registration the NGO's no need to make tax. After getting , the donor can claim income tax deduction from their individual taxation.

Now, after initial registration of 12 A, Department is approving the same for 3 years ie NGO will get a provisional registration certificate for three years and this can be renewed after 3 years. After renewal, the certificate will be valid for 5 years. All NGOs has to renew their certificate for 5 years.

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Advantages of 12A certificate

The income of the NGO shall exempt from taxes.
It can avail benefits by taking grants from any Government agencies ( both national and international)
Further, it can avail benefits of the FCRA Registration.

Conditions for applying 12A

They should either be a charitable trust or a registered society or section 8 Company.
They should not have any income generated from trade or business
Such organizations should not use their assets or income for any other purpose other than for charitable purpose
Regular books of accounts to be maintained.
The trustees or its members should not be involved in deriving any undue benefits from these funds
They should not work for the benefit of any particular caste or religion.
In case of business-related income, the organization should maintain a separate book of accounts. However, the donations received by the NGO must not be used for such businesses.