Sec.80G & Sec.12A

Sections 80G and 12A of the Income Tax Act in India are related to tax exemptions for donations made to certain organizations. These sections provide benefits to both donors and recipient organizations, such as NGOs and charitable institutions. Here's an overview of Sections 80G and 12A:

Section 80G:

Purpose:

Tax Deduction for Donors: Section 80G provides tax benefits to individuals and businesses making donations to specified funds, charitable institutions, and NGOs.

Key Points:

Eligibility Criteria: The organization must be approved by the Income Tax Department to offer donors the benefit of tax deductions under Section 80G.

Approval Process: Charitable organizations need to apply for and obtain approval from the Income Tax Department to be eligible for Section 80G benefits.

Types of Donations: Donations made to eligible organizations under Section 80G are eligible for deductions from taxable income. The specific percentage of deduction may vary based on whether the donation is eligible for 100% or 50% deduction.

Maximum Limit: There may be a maximum limit on the amount of donation eligible for deduction, and the donor must retain a receipt from the charitable organization.

Type of Organization: Different categories of charitable organizations may be eligible for different percentages of deduction. For example, certain charitable trusts and institutions may be eligible for 100% deduction, while others may qualify for 50% deduction.

Section 12A:

Purpose:

Exemption for Charitable Organizations: Section 12A provides exemptions to charitable and religious trusts or institutions regarding their income from property held for charitable or religious purposes.

Key Points:

Application for Registration: Charitable and religious trusts or institutions need to apply for registration under Section 12A with the Income Tax Department.

Exemption from Tax: Once registered under Section 12A, the income derived from property held for charitable or religious purposes is exempt from income tax.

Continuation of Exemption: Charitable organizations need to comply with the conditions specified in Section 12A to continue enjoying the exemption. Failure to comply may result in the withdrawal of exemption benefits.

Filing of Annual Returns: Organizations registered under Section 12A are required to file annual returns with the Income Tax Department to maintain their tax-exempt status.

Application for Renewal: Registration under Section 12A may need to be renewed periodically, and the organization must apply for renewal to continue availing of tax exemptions.