Income Tax Registration: To avail Income Tax exemption for not for profit organizations, the NGOs need to apply for registration under 12A of Income Tax Act. If the organization is not registered, then they need to pay tax on the un-utilized money of the income they receive during the year. (all the donations the organizations receive treated as income, unless a donor gives money for organization’s corpus fund –At times donors gives money to NGOs towards corpus fund – such funds received by an NGO are exempt from Income Tax – however, the donor need to send a document to the NGO clearly mentioning the purpose of the grant is for Corpus.
How to Apply: Organisations seeking registration will have to apply to the Income Tax Commissioner, using form 10-A Application for registration.
*Two sets of the following documents needs to be attached alongwith application form.
* Bye-laws, Memorandum of Association (attested copies)
* Audited statement of accounts for the last two years (if the organization is less than two years old, then you can send at least one year audited statement of accounts.
The application needs to be submitted to the Income Tax Commissioner of your locality. After reviewing your application, the Income tax authorities may ask you for further information or/and also may ask you to show the originals.
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