Overview
12A Registration is imperative for all kinds of NGOs- whether Trust, Society, or Section 8 Company. Usually, companies register themselves under Section 12A of the Income Tax Act to avail the income tax exemption.
Therefore, NGOs registered under Section 12A relish the tax exemption on their surplus income completely. Hence, it’s substantial for every NGO and Trust to be aware of the registration under Section 12A.
Furthermore, they must ensure that they obtain the registration soon after the incorporation.
Without this, the receipts shall be entitled to normal tax rates and the exemptions accessible would evade. The registration would likewise assist in looking for grants from government or associations abroad.
Eligibility for 12A Registration
- Only trusts and other charitable organizations and Section 8 companies formed to provide benefits to the public are eligible for section 12A registration.
- The benefit of 12A registration is not available to private or family trusts. The activities of the trusts should be beneficial to the public.