Charitable Trusts, Religious Trusts, Societies and Section 8 Companies claiming exemption under Section 11 and 12 of the Income Tax Act, must obtain 12A registration. Private or family trusts are not allowed such exemptions and cannot obtain 12A registration. To obtain 12A Registration, an application for registration of charitable or religious trust or institution under clause (aa) of sub-section (1) of section 12A of the Income-tax Act, 1961 must be made to the Commissioner of Income Tax.
Once the application made by the NGO in the specified format to the Commissioner of Income Tax, the commissioner shall review the same. On review of the application, the commissioner may ask for additional information or document to submit. On satisfaction of all information or application, the Commissioner shall pass an order in writing registering the Trust/Institution under Section 12A of Income Tax Act. On non-satisfaction of an application, the commissioner may reject the application of an NGO.
NGO is registered for non-profit activities. However, there may be income of NGOs. If NGO does not have registration certificate under section 12A of Income Tax Act, It has to pay tax as per normal rates. So to get income tax exemption, it is necessary to have 12A certificate. Application for registration of an organisation under the Clause 12A of Income Tax Act is required in a prescribed Form for seeking charitable status from the Department of Income Tax.