Section 80g consultancy services

Crystal Consultancy is a singleton firm which offers services in ngo registration, ngo amendment, 12a and 80g registration, foreign funding registration of non government organizations which is called FCRA(Foreign Contribution Regulation Act) along with website designing, website development, search engine optimization and social media optimization. It is indeed the complete solution for NGOs for services like 80g registration. There were times when we had to rush to income tax offices for physical hearing where we had to show bills in name of ngo, photographs of events of ngos, annual reports, balance sheets, bank statements of our organization in order to get approval for 12a and 80g of Income Tax Act, 1961. Earlier, the time duration was 6 months from the date of filing of the application. The covid has drastically changed everything. After covid, the system has been centralized which means that the certificate will be issued by income tax office, Bangalore subject to provisional registration only. If we wish to get renewal certificate for 80g deduction or 12a, income tax authorities are calling the ngo representatives for physical appearance along with the all the evidences of activities in the last 3 years. Even central and state ministries are liable to pay taxes. Thousands of ngos apply for grants. Ministries shortlist those ngos which are having 80g certificate. By doing so and issuing them sanction letters, they also get tax benefits. As you may be well aware that the donors donating to ngos possessing 80g registration, donors get 50 percent tax benefit out of the donated amount. This means that donors will claim their 80g deduction while filing their income tax returns. That 50 percent donated amount will be adjusted in the taxable income of the donor. The donors must take the receipt from those ngos which should bear 80g and 12a registration number along with the pan number and registration number of the organization. On the another hand, the non government organization shall note the pan number and aadhaar card number of the donor for its records. With reference to income tax notifications, nowadays, ngos are supposed to file Form 10BD mentioning the donor details who claim tax exemption under section 80g. In this form, various details of the donor like address, pan number and the donation amount has to be filled. After filing of Form 10BD by the ngo, the ngo can easily download Form 10BE certificate and provide the same copy to the donors. This has been implemented by the income tax department in order to avoid claiming of fake exemptions and bring more transparency and flexibility to the system. An amount upto 2000 rupees can be accepted via cash but the amount exceeding 2000 rupees must be taken online in bank account of ngo or through cheque or demand draft in favour of the organization.

What are tax exemptions

Tax exemptions are a significant part of the tax system which have been generally utilized by the states all over the planet. People and organizations can be given a technique for reducing their overall tax collection rate and gain financial benefits. Tax exemptions are conceded for different reasons, going from giving help to poor people and empowering interest in specific areas. Tax exemptions help the government run more efficiently. The government has to spend a lot of money on various projects and cannot provide any services from income tax. If there were no taxes, the government would have to provide taxes on everything else. In addition, it may not be able to provide certain services because it may not have sufficient funds. Tax relief is not a gift from the government to citizens. This is a service provided by the government to its citizens. While tax exemptions can be beneficial, they likewise accompany complex issues that should be perceived before they can be carried out. In fact, tax exemptions are tax reductions available to certain individuals, businesses and organizations. They allow taxpayers to reduce their taxable income and in some cases avoid paying taxes altogether. Tax exemptions are presented for various reasons however a large portion of them come into one of the accompanying classes: economic or industrial tax exemptions. These exclusions empower interest in specific organizations and exercises by giving financial backers annual tax cuts. Tax exemptions are categorized into charitable and religious tax exemptions. These exemptions allow taxpayers to deduct donations to good cause, churches, schools and other non-profitable organizations from taxable income.

Who is eligible under section 80g?

Section 80g allows for tax benefits on donations to certain organizations. The following are the eligible organizations under this section:
Charitable institutions or trusts
Section 8 Company which comes under Companies Act 2013
A charitable institution under the state government

Donations which can be claimed as deductions under section 80g

Under Section 80g, you can claim a tax deduction for any donation made to organizations which are eligible. Here are the types of donations which qualify for deduction under section 80g of Income tax act, 1961:
Donations which are made to charitable organizations such as educational institutions, hospitals and other scientific research based organizations.
Donations which are made for research purposes in the sector of science and technology.
Donations made for social welfare schemes. Donations which are made to political parties.
Donations made for the construction of buildings of schools and for other charitable purposes.
Donations which are made for the construction of a medical research institution or a hospital.
Donations which are made by companies in order to promote sports.
Donations which are made by companies so that they can promote art and culture in the country.
Donations which are made in order to foster national integration. Donations made in order to prevent cruelty against women or children.
Donations which are made to a National Sports Development Fund and other similar funds.

What is 80gga?

The Income Tax Act 1961 of India has few sections and subsections concerning the tax collection from residents. One such section is section 80gga which deals with the deduction from taxable income for certain payments made by an individual or a Hindu Undivided Family (HUF). Section 80gga of the Income Tax Act 1961 is a section of the Income Tax Act which permits an individual, HUF or a company to claim a deduction from their taxable income for any amount contributed by them, directly or indirectly. It accommodates for a deduction in respect of certain donations for scientific research or rural development. The entities eligible for this deduction include:
A public sector company or a local authority or an association or institution approved by the National Committee for Promotion of Social and Economic Welfare.
An association or institution approved by the National Committee for carrying out research in social science or statistical research.
An association or institution approved by the National Committee for carrying out research in any other subject.
The amount of deduction under section 80GGA is equal to the amount of donation made which is 100%, subject to a maximum limit of Rs. 10,000 in cash. There is no limit of donation made by cheque or online. Further, in order to claim the deduction, the taxpayer must obtain a certificate from the entity to which the donation is made, stating that the donation has been used for scientific research or rural development. It is important to note that this deduction is not available to taxpayers who plan to claim a deduction under section 80g or section 80GGC of the Income Tax Act, 1961.

Benefits of Indian tax system

Some of the numerous benefits of the tax system in India are as follows:-
Generation of income: The tax system in India is a fundamental source for the public authority. It really helps the public authority in financing different public government assistance projects and foundation projects. Further, it adds to the economy of the nation.
Wealth redistribution: Through this tax system, the government can redistribute wealth by imposing higher tax rates on the richer people and lower tax rate on the financially weaker sections of the society. Consequenty, it results in minifying income inequality and promoting social justice.
Encourage savings and investment: The Indian tax system offers several incentives to encourage savings and investment. For instance, certain types of investments such as Public Provident Fund (PPF), National Pension System (NPS) and tax-saving fixed deposits are eligible for tax deductions.
Encourages compliance: The Indian tax system has a huge number of penalties and fines for non-compliance which encourages taxpayers to file their taxes before due date and also in correct manner. This helps to reduce tax evasion and increase revenue collection.
Encourages development of business: The tax system in India offers a few motivators to foster improvement of business. For example, tax reductions are allowed to new organizations in particular areas and innovative work costs are qualified for charge derivations.
Supports financial growth: The Indian tax system assumes an important part in supporting monetary development by giving a steady and unsurprising climate for organizations to work. This assists with drawing in unfamiliar venture and urges homegrown organizations to thrive.
Overall, the Indian tax system serves as an essential tool for the government to promote economic growth and all round development of the common mass.

You can definitely approach us if you wish to get your ngo registered under section 12a and 80g of income tax act, 1961 for availing tax benefits. We have a team of highly experienced professionals who can comprehend your issues and resolve it in a very short span of time. You can also whatsapp at 9711105597.