12A, 80G & FCRA Registration
FCRA Registration and Registering 12A or 80G – An Overview
The FCRA department comes under the regulation of MHA (Ministry of Home Affairs). It is deemed optional for trust/NGO/ Section 8 company.
To regulate the foreign contributions or hospitality received by any company, association, or even an individual, the government consolidated all the regulations and laws related to such transactions. For the same purpose, FCRA or Foreign Contribution (Regulation) Act, 2010 was introduced.
The FCRA Act is aimed at creating a transparent mechanism for organizations and individuals through e-governance of activities related to FCRA. This would discourage any detrimental activity against the National interest of India.
NGOs can register through 12A for tax exemption on any surplus funds they own and can also obtain the 80G certification to get the donor’s tax exception. Let us understand the benefits of these registrations.
Benefits of 12A, 80G, and FCRA Registration
Benefits of FCRA
Eligibility for FCRA Registration, and Section12A, 80G
Following entities are not eligible for registration under FCRA:
Other norms for FCRA registrations:
An organisation should also meet these conditions for FCRA registration:
Eligibility for Section 12A and 80 G
After registration of NGO and application for Section 12A exemptions and 80G certificate can be made immediately. These applications can be filed together or separately with the commissioner of the Income Tax Department who has jurisdiction over the organisation.
Process of applying for FCRA registration, Section 12A, 80G
The long list of documents can become difficult to process and upload for the promoters. At MUDS companies can avail FCRA registration package to get this job done easily without any hassles. Our team ensures that the file is error-free and thus chances of application rejection are reduced.
FCRA registration is valid for 5 years from the date of issue of registration under the Income Tax Act. After this, the registration needs to be renewed. For prior permission, the certificate is valid for 5 years or the time till the foreign contribution is fully utilized.
Documents Required For Section 12A
Documents Required for 80G and FCRA Registration
For Section 80G: :
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NGOs receiving or willing to receive foreign funds should get FCRA registration to ensure transparency and support from the government.
Benefits of Registering 12A
- Taxation exemption for income of NGOs.
- Benefits in taking grants from abroad, government, and other agencies.
- Availing benefits of FCRA Registration.
Benefits of Registering 80G
- The donor of NGOs with 80G certification can enjoy the benefits of tax exemption on donation.
- It attracts more donations to the NGOs.
As we have discussed there are two separate ways to receive a foreign contribution, i.e. registration and prior permission. Following are the point of difference is the eligibility criteria.
For registration: It is required that the applicant
- Is in existence for a minimum of 3 years.
- Has done reasonable work in the public interest.
- Has spent at least Rs.10,00,000/- in the last 3 years for main objectives.
For Prior Permission: The applicant is not required to be registered for any minimum period as they are in the initial state. No work experience is required.