80G Registration for Non-Profit Orgnaisation

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Non-Profit

Most Important Conditions to be Satisifed for Income Tax Deduction for Donations – 80G Registration for Non-Profit Orgnaisation

80G Registration Exempts A Company From Partially Or Fully Paying Taxes If The Company Has Made Any Donations To Charitable Trusts Or Section 8 Companies Or Organizations That Are Registered For The Liberty Of Exemption From Taxes. If A Charitable Organization Or Trust Is Registered Under Section 12 A, Then It Allowed The Liberty Of Tax Exemption Under Section 80G Registration. There Is However A Maximum Allowable Deduction Criterion. The Criterion Is If The Aggregate Of The Amount You Donate Exceeds 10% Of The Total Gross Income, Then The Excess Amount Will Not Qualify For Tax benefits.

Requirements For Approval Of An Institution Or Fund Under Section 80G -Rule 11AA

Form 10 G Is Required By The Trust So That Can Issue A Certificate To Donors And They Can Claim An Exemption For Donations Made To Trust Under Sec 80G. The Application For Approval Of Any Institution Or Fund Under Sec 80 G In Relation To Donations Made After 31st Day Of March 1992 Shall Be In Form No. 10 G.

Form 10G Shall Be Accompanied By The Following Documents: 

(I) Copy Of Registration Granted Under Sec 12A Or Copy Of Notification Issued Under Sec 10(23) Or 10(23C). (Regimental Fund Or Non-Public Fund) (Ii) Notes On Activities Of Institution Or Fund Since Its Inception Or During The Last Three Years, Which Is Less. (Iii) Copies Of Accounts Of The Institution Or Fund Since Its Inception Or During The Last Three Years, Whichever Is Less.

The Commissioner May Call For Such Further Documents Or Information From The Institution Or Fund Or Because Such Inquires To Be Made As He May Deem Necessary In Order To Satisfy Himself About The Genuineness Of The Activities Of Such Institution Or Fund.

Approval / Rejection Of Form 10G: 

(I) Where The Commissioner Is Satisfied That All The Conditions Specified In 80G Are Fulfilled By The Institution Or Fund, He Shall Record Such Satisfaction In Writing And Grant Approval To The Institution Or Fund Specifying The Assessment Year Or Years For Which The Approval Is Valid.

(Ii) Where The Commissioner Is Satisfied That One Or More Of The Conditions Are Not Fulfilled (Explained Subsequently), He Shall Reject The Application For Approval, After Recording The Reasons For Such Rejection In Writing.

(Iii) No Order Of Rejection Of An Application Shall Be Passed Without Giving The Institution Or Fund An Opportunity Of Being Heard.

(Iv) The Time Limit Within Which The Commissioner Shall Pass An Order Either Granting The Approval Or Rejecting The Application Shall Not Exceed 6 Months From The End Of The Month In Which Such Application Was Made.

(V) In Computing The Period Of Six Months, Any Time Taken By The Applicant Is Not Complying With The Directions Of The Commissioner Shall Be Excluded.

Conditions To Be Satisfied – Under Sec 80G Registration

An institution Or Fund Must Be Established In India For A Charitable Purpose And It Must Fulfill The Following Conditions. Where The Institution Or Fund Derives Any Income, Such Income Would Not Be Liable To Inclusion In Its Total Income Under The Provisions Of Sec 11 And 12 Or Clause (23AA) Regimental Fund Or Clause (23C) Of Sec 10.

Where An Institution Or Fund Derives Any Income, Being Profits And Gains Of Business, The Condition That Such Income Would Not Be Liable To Inclusion In Its Total Income Under The Provisions Of Sec 11 Shall Not Apply In Relation To Such Income, If: 

  1. The Instrument Or Fund Maintains Separate Books Of Account In Respect Of Such Business. 
  2. The Donation Made To The Institution Or Fund Is Not Used By It, Directly Or Indirectly, For The Purposes Of Such Business.
  3.  The Institution Or Fund Issues To A Person Making The Donation A Certificate To The Effect That It Maintains Separate Books Of Account In Respect Of Such Business And That The Donations Received By It Will Not Be Used, Directly Or Indirectly, For The Purposes Of Such Business.

The Instrument Under Which The Institution Or Fund Is Constituted Does Not, Or The Rules Governing The Institution Or Fund Do Not Contain Any Provision For The Transferor Application At Any Time Of The Whole Or Any Part Of The Income Or Assets Of The Institution Or Fund For Any Purpose Other Than A Charitable Purpose. The Institution Or Fund Is Not Expressed To Be For The Benefit Of Any Particular Religious Community Or Caste.

The Institution Or Fund Maintains Regular Accounts Of Its Receipts And Expenditure.

Legal Disclaimer: The information contained in this blog post is for general information and educational purposes only. Nothing contained in this blog post should be construed as legal advice from The Aran Law Firm or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter.

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