Sec 12AA & Sec 80 G

Section 12AA and Section 80G of the Income Tax Act are provisions that provide tax exemptions to charitable organizations in India. Here’s a brief overview of their advantages, disadvantages, and procedures:

Advantages of Section 12AA and Section 80G:

1. Tax Exemption: Organizations registered under Section 12AA are eligible for income tax exemption on their income. Donations made to organizations registered under Section 80G are eligible for tax deductions.
2. Credibility: Registration under Section 12AA and Section 80G lends credibility to the organization and helps in attracting donations from individuals and corporates.

Disadvantages of Section 12AA and Section 80G:

1. Stringent Compliance: Organizations registered under Section 12AA and Section 80G need to comply with several legal requirements and file returns regularly.
2. Eligibility Criteria: Organizations need to meet specific criteria to be eligible for registration under Section 12AA and Section 80G.

Procedure for Section 12AA Registration:

1. Prepare an application in Form 10A and submit it to the Commissioner of Income Tax along with the required documents.
2. The Commissioner will verify the application and may conduct an inspection of the organization.
3. If satisfied, the Commissioner will register the organization under Section 12AA.

Procedure for Section 80G Registration:

1. Prepare an application in Form 10G and submit it to the Commissioner of Income Tax along with the required documents.
2. The Commissioner will verify the application and may conduct an inspection of the organization.
3. If satisfied, the Commissioner will issue a registration certificate under Section 80G.

In summary, Section 12AA and Section 80G of the Income Tax Act provide tax exemptions to charitable organizations in India. The advantages of these provisions include tax exemption and credibility, while the disadvantages include stringent compliance and eligibility criteria. The procedure for Section 12AA and Section 80G registration involves submitting an application in the prescribed format to the Commissioner of Income Tax along with the required documents, and upon verification, the Commissioner will issue a registration certificate.