It is a license issued to NGOs whose donors can claim deduction while calculating their taxable income. If an NGO gets itself registered under section 80G then the person or the organization making a donation to the NGO will get a deduction from his/its taxable income. A Trust or Society or Section 8 Company can apply for license under Section 80G of the Income Tax Act.

To encourage people to donate, the government also allows for income tax deductions under Section 80G for the amount which has been donated. The amount which has been donated by a person is allowed to be claimed as a deduction under Section 80G, at the time of filing his income tax return.

This Deduction for Donation can be claimed by any taxpayer (whether Individual/Partnership Firm/HUF /Company/ LLP etc) irrespective of whether he is earning income from salary or business. The deduction available under Section 80G is over and above the deduction of Rs. 1,50,000 allowed under Section 80C.

1. Provisional Registration
2. Regular Registration

Provisional Registration ~ Regular Registration:

An application for provisional registration under Section 80G in Form 10A will be made to Income Tax Department one month before the commencement of activities and the provisional registration is given by the IT department online. The registration once granted shall be valid for three years from the Assessment Year from which the registration is sought.

The provisional registration so granted shall be valid for a period of 3 years and hence needs to be renewed at the end of the above mentioned timelines. The registration so renewed shall be valid only for 5 years and needs to be renewed at the end of each 5 years.

The applicant has to convert this provisional registration earliest of at least 6 months before the expiry or within 6 months of commencement of its activities. The application for conversion of provisional registration to regular registration will be made to Income Tax department in Form 10AB. The regular registration is valid for a period of 5 years from the date of its issuance.

• The NGO should not have any income which are not exempted, such as business income. If, the NGO has business income then it should maintain separate books of accounts and should not divert donations received for the purpose of such business.
• The bylaws or objectives of the NGOs should not contain any provision for spending the income or assets of the NGO for purposes other than charitable.
• The NGO is not working for the benefit of particular religious’ community or caste.
• The NGO maintains regular accounts of its receipts & expenditures.
• The NGO should be a registered Society/Trust/Section-8 Company.
• Donations made are eligible to be claimed as a deduction under Section 80G in all cases except in cases where the donation has been made in kind (eg: food, clothes, medicine etc). In order to claim this deduction, the donor is also required to furnish a proof of payment. A stamped receipt is issued by the recipient trust in this regard, details of which should be mentioned by the taxpayer while filing his Income Tax Return.

• A

  Trustees/Members/Directors Documents

  1. Trustees/Members/Directors PAN
  2. Trustees/Members/Directors ID Proofs
     Aadhaar Card or Voter ID or Passport or Driver's License
  3. Trustees/Members/Directors Address Proofs:
     Latest one month Savings Bank statement or
     Latest Telephone Bill on his own name or
     Latest Moblie Bill on his name or
     Latest Power Bill on his own name.
  4. Trustees/Members/Directors latest passport size photograph
  5. Trustees/Members/Directors Email ids
  6. Trustees/Members/Directors Mobile Numbers linked with their Aadhar
  7. Incase of Foreign direcrtors, International Passport is mandatory
• B

  NGO Documents

  1. Registered Trust Deed/Bylaws of a Society/ Memorandum and Articles of Association of a Company
  2. Trust/Society/Company PAN
  3. FCRA Registration Certificate if any
  4. DARPAN ID if any
  5. CSR Certificate if any
  6. Existing order granting approval under clause (23C) of section 10
  7. In case of existing entities, copies of annual accounts for the period not exceeding 3 years immediately preceding the year in which the application is made
  8. Where the income of the entity includes profits and gains of business as per the provisions of sub-section (4A) of section 11, copies of annual accounts and audit report u/s 44AB for 3 years immediately preceding the year in which the said application is made
  9. Details of activities since its inception or last three years whichever is less

You can get your NGOs Section 80G license in the following process:

• 1

  Log on to the E-filing portal of IT department vide https://www.incometaxindiaefiling.gov.in/home

• 2

  Go to “Income Tax Forms” under e-File tab

• 3

  Select the Form Name as “Form 10A” and relevant Assessment Year from the drop down list

• 4

  Select the option of “Prepare and Submit Online” in submission mode

• 5

  Fill in the details as required in the form and attach the required and applicable attachments

• 6

  Submit the form using digital signatures or EVC as required while return filing

In some cases, there is no maximum limit for the deduction which can be claimed for donations made under section 80G. However, in some cases deduction on donations under Section 80G is limited to 10% of the Adjusted Gross Total Income of the taxpayer.

The adjusted gross total income of a taxpayer for the purpose of Section 80G is computed as follows:

* Deduction under Section 80G is limited to a maximum of 10% of the Gross Total Income.

The balance income after deductions of donations would be taxable as per the income tax slabs of the taxpayer.

Computation of whether deduction is allowed without any maximum limit or is limited to 10% of the adjusted gross total income depends on the type of institution to whom the amount has been donated. The donations to institutions which are eligible for deduction without any limit and donations to institutions which have a maximum limit for claiming deduction have been mentioned below.

Deductions which are allowed without any maximum limit:

The following donations are allowed to be claimed as a deduction under section 80G. However, in some cases the full deduction is allowed of the amount donated whereas in some cases only 50% of the amount donated can be claimed as a deduction.

Donations eligible for Full Deduction:

• National Defence Fund set by the Central Govt
• Prime Minister’s National Relief Fund
• Prime Minister’s Armenia Earthquake Relief Fund
• National Foundation for Communal Harmony
• University/ Education Institution of National eminence approved by the prescribed authority
• Maharashtra Chief Minister’s Earthquake Relief Fund
• Any Fund set-up by the State Govt of Gujarat, exclusively for providing relief to the victims of earthquake of Gujarat
• Zila Saksharta Samiti constituted in any district
• National Blood Transfusion Council or any State Blood Transfusion Council
• Any fund set up by the state Govt to provide Medical Relief to the poor
• Army Central Welfare Fund or Indian Naval Benevolent Fund or the Air Force Central Welfare Fund
• National Illness Assistance Fund
• Andhra Pradesh Chief Minister’s Cyclone Relief Fund
• Chief Minister Relief Fund or the Lieutenant Governor’s Relief Fund in respect of any State or Territory
• National Sports Fund set up by the Central Govt
• National Cultural Fund set up by the Central Govt
• Fund for Technology Development and Application, set up by the Central Govt
• National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental
• Retardation and Multiple Disabilities

Donations eligible for 50% Deduction:

• Jawaharlal Nehru Memorial Fund
• Prime Minister’s Drought Relief Fund
• National Children’s Fund
• Indira Gandhi Memorial Fund
• Rajiv Gandhi Foundation

Donations with max limit of 10% of Adjusted Gross Total Income:

The following deductions are allowed subject to a maximum of 10% of the adjusted gross total income. For eg, if your Adjusted Total Income is Rs. 9,00,000 (computed as per method given above), you would be allowed a maximum deduction of only 10% i.e. Rs. 90,000 if donation is made to any of the following.

Donations eligible for full Deduction:

• Donation to Government or any approved local authority, institution or association to be utilised for promoting family planning.
• Any sums paid by a company to Indian Olympic Association or to any other association notified by the Central Govt for the purpose of development of infrastructure for sports and games or for the sponsorship of sports and games.

Donations eligible for 50% Deduction:

The following donations are allowed with 50% deduction subject to qualifying amount. Considering the same example as given above, if donation is made to any of the following, you can claim deduction for only donation up to Rs. 90,000. Moreover, the deduction allowed would only be 50% of 90,000 i.e. Rs. 45,000.

• Donation to Government or any approved local authority, institution or association to be utilized for any charitable purpose other than promoting family planning.
• Donation to any authority constituted in India by or under any law for satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages or for both.
• To any corporation established by the Central or any State Govt for promoting the interests of the members of a minority community.
• Any notified temple, mosque, gurdwara, church or other place notified by the Central Govt to be of historic, archaeological or artistic importance for renovation or repair of such place.

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