80 G Registration is a much needed registration for NGO for the purpose of exemption of Income tax. A donor who might be an individual, company, association or organization is entitled to a deduction in the total income when donating some amount to a Non Profit Organization (NGO). The exemption is under 80G of the Income Tax Act. However, the amount donated by a donor, must not exceed ten percent of gross total income of the donor.
The donations have to be made in money and the transaction of money is to be shown in this case. No other elements like bike, cycle, car or any other physical object is to be judged other than money. In case of receipts issued by donors by a nonprofit organization must have the number and date of the 80G certificate. This indicates the period till which the certificate is valid.
The 80G Registration process requires a certain period. 80 G registration is granted for certain period of 3 years to new NGOs who wish to take income tax exemption registration. After 3 years NGOs can apply and get renewal of the registration of 80G certificate for next 5 years. The NGOs who want to extend the 80G registration after completion of 5 years can again apply fro renewal of the 80 G registration.. The documents required for the purpose is a copy of Trust Deed, Bye-laws, Registration Certificate and detail of the work up to 3 years or its inception whichever is less, copies of the audited accounts. There are few conditions that are to be fulfilled under 80 G Registration that is the NGO should not have any income which not exempted, like business income. The NGO should not work for the benefit for any religious community or caste. The NGO should maintain regular accounts of expenditures and receipts.
The benefit in this case is limited and the aggregate of the sums that has been donated has to be found out for the exemption, that, the donor is to receive. There is a restrain in the benefit that one can receive for the registration.
National NGO Federation provides documentation consultancy for Income Tax exemption registration process to get Section 80 G registration certificate under Income Tax Act.