- 12 AA Registration : The Income Tax Department of India has made it mandatory for Non-profit entities to get themselves registered under Section 12A. It is a one-time registration and the main motive of this registration is exemption from paying income tax on their surplus income. If the NGOs do not get registered you will have to pay tax as per normal rates.
Post 12A Registration there is a process of Renewal as well . The NGOs need to renew it every 5 years .
- 80G Registration : Another Tax benefit allowed by the Income Tax of India to Non Profit entities is under Section 80G.The main objective of 80G registration is to encourage more and more Donors to donate fund to such organizations. The Donors gets tax exemption on 50% of their donation and is allowed to deduct their donation from their gross total income. To avail tax exemption the donor needs to attach the stamped receipt against the donation that is issued by the NGO.
Post 80G Registration the NGO needs to follow a Renewal process as well, this renewal needs to be done every 5 years.