12A Registration for Trust:-
Trust is a entity which is formed for the benefit of a single person or group of person. It can be a public or private. It also can be a state level and national level. It work on concept of Non-profit basis.
Benefits of Section 12A Registration
The advantages of registering under Section 12 A are:
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Fund used for charitable or for religious purposes are considered as income application. Income application is expenses used for charitable purposes when calculating the income of trust.
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The income will be totally free from taxation.
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All those registered under this section also enjoy benefits for accumulating income which is not more than 15% for charitable purposes.
- According to Section 11(2), this accumulation of income will not be included in the total income.
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Section 12 A is a onetime registration and it is active till the date of cancellation. There is no need of renewing the registration again and again.
Eligibility of Section 12 A Registration
The following entities are eligible to register under Section 12 A:
Charitable Trusts, Religious Institution, Societies and Companies that come under Section 8 are eligible for Section 12 A registration. Private or Family Trusts are not applicable for Section 12 A registration.
Connect Soul makes sure that your application for getting registration under section 12 A is supported by the correct documents. Schedule an appointment with our experts to know more about Section 12 A registration.
80 G Registration for Trust:-
There are certain contributions and donations under the Income Tax Act which are eligible for tax deduction under Section 80G. Non profit organisation who apply for this registration are thoroughly scrutinised by the IT Department before granting this certificate
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Eligibility for 80 G Exemption
80 G deduction is only available for donation made to charities mentioned under 80 G category. Also, charities with a religious or business angle are not granted 80 G certification. In the same manner, if you are donating to a political party or any organisations which are not registered under 80 G, you cannot avail the tax exemption for the amount of donation made. It will be considered as taxable income only.
Tax Benefits:-
- For the Donors: Donors get a direct tax exemption on the amount donated.
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For Non-profitable organisations: The non-profit organisation gets an exemption of 10% for the income received through donations.
Mode of Payment Eligible for Tax Deduction
Gifts do not qualify for tax exemption. Donations made in kind will not qualify for tax exemption even when you make a donation to help out in some natural disaster like – earthquake, floods, etc.
Donations made from cash or cheque is only applicable for tax exemption.
When donations are deducted from salary, donation receipt must be obtained by the employee from the employer, in the name of the employer. This will allow employees to claim exemption under Section 80G.
Connect Soul can help you submit the appropriate documents along with the application of obtaining 80G certification. We make sure that your application doesn’t get rejected because of lack of or incorrect documents.