Common Mistakes to Avoid During 80G(5) Registration

[Ishita Ramani]

Non-Profit Organizations (NPOs) and NGOs in India goal to achieve 80G(5) Registration to provide tax deductions to their donors. While the process appears simple, many businesses still face unnecessary delays or rejections because of common errors during the duration of the registration.

In this article, we shall cover these errors, explain the common mistakes to avoid 80G(5) Registration.

What is 80G(5) Registration?

80G(5) Registration lets in NGOs and charitable establishments to offer tax deduction benefits under Section 80G of the Income Tax Act, 1961. Donors contributing to an 80G(5) registered business can claim a deduction of up to 50% of the donated quantity, making your business more appealing to customers.

Benefits of 80G(5) Registration

• Attracts greater donations by offering tax savings to donors.
• Enhances credibility and builds belief among stakeholders.
• Eligibility for authorities investment and CSR contributions.
• Creates transparency about the NGO’s financial and compliance practices.

Common Mistakes to Avoid During 80G(5) Registration

1. Incomplete Documentation

Submitting incomplete or wrong documents is one of the most common mistakes for rejection.

• Registration certificates
• Trust Deed or Memorandum of Association
• PAN Card of the entity
• Audited monetary statements for the ultimate three years

2. Non-Registration under 12A

An corporation ought to be registered below Section 12A before applying for 80G(five) Registration. Without 12A, the application may be rejected mechanically.

3. Financial Non-Compliance

Organizations ought to preserve proper accounting statistics and feature their accounts audited yearly. Lack of financial transparency increases doubts during verification.

4. Mismatch of Details

Mismatch among the name, cope with, or goals stated in specific documents (like PAN, registration certificates, bank info) can result in delays or rejections.

5. Incorrect Filing of Form 10A

Form 10A needs to be efficiently filled and submitted on-line. Missing fields, wrong class choice, or wrong supporting documents can cause rejection.

6. Failure to Update Changes

If there was any exchange in the trustee, address, or goals, and if such adjustments are not updated with authorities, the software may get confused.

7. Delay in Filing

Post the Finance Act 2020, NGOs need to follow for validation or fresh registration within unique cut-off dates. Delays in filing can result in the lack of 80G benefits.

Tips for Successful 80G(5) Registration

• Cross check all the supporting documents.
• Ensure earlier 12A registration is active.
• Keep audited money owed equipped and up to date.
• File Form 10A carefully through the Income Tax portal.

Conclusion

Getting 80G(5) Registration is crucial for any NGO seeking to build credibility and attract donations. Avoiding the common mistakes listed above can make the process smoother and faster. Being thorough and compliant will help you achieve smooth registration.