80G & 12A Certification Assistance by Sigma Solutions

Introduction

In 2024, a newly formed education-focused NGO realized that in order to raise funds from donors and corporate CSR programs, they needed to provide tax benefits to their supporters. This required obtaining 80G and 12A certifications under the Income Tax Act, 1961.

However, the NGO’s founders were unfamiliar with the process, eligibility criteria, and compliance requirements needed to secure these vital certifications. To avoid costly mistakes and delays, they partnered with Sigma Solutions, a trusted expert in NGO compliance and registration services.

Challenges Faced by the NGO

1. Unclear Understanding of 80G & 12A Benefits

Initially unaware that:
- 80G Certification allows donors to claim up to 50% tax deduction
- 12A Registration exempts the NGO’s income from taxation

2. Incomplete Documentation & Errors

Lacked:
- Audited financials and activity reports
- Proper board resolutions and compliance declarations
Risked application rejection due to documentation gaps

3. Delays in Processing & Compliance Navigation

Found it difficult to:
- Navigate the Income Tax Department’s portal
- Respond to queries and clarifications raised during scrutiny

4. Financial Structuring & Legal Compliance Gaps

No:
- Proper donation tracking system
- Formal accounting processes or internal financial policies

5. Fundraising Challenges Without Certifications

Missed opportunities to:
- Apply for CSR grants
- Attract major donations and global NGO funding

Solution Provided by Sigma Solutions

Sigma Solutions offered a comprehensive, end-to-end 80G & 12A registration service, covering documentation, application filing, financial structuring, and fundraising readiness.

Implementation Process

1. Eligibility Assessment & Documentation Review

Verified:
- NGO’s legal entity status, objective alignment, and operational activities
Assisted in preparing:
- Income and expenditure statements
- Activity reports demonstrating charitable activities
- Board meeting minutes and trustee resolutions

2. Application Filing & Compliance Structuring

Filed:
- Form 10A for 12A Registration
- Form 10G for 80G Certification
Attached:
- Legal incorporation documents (Trust Deed or Section 8 Incorporation Certificate)
- Audited financials, PAN card, office address proof
Ensured:
- 100% compliance with Income Tax Department’s technical standards

3. Liaisoning with Income Tax Authorities

Acted as the single point of contact to:
- Respond to clarifications, scrutiny notices, and compliance queries
- Submit additional proofs if requested by the Income Tax Office
Ensured:
- Timely resolution of queries to avoid rejection and re-filing

4. Financial Structuring & Donor Compliance Setup

Set up:
- Accounting systems for donation tracking
- Audit-ready records for future compliance and FCRA eligibility
Guided on:
- Proper utilization of tax-exempt donations
- Annual filing requirements post-certification

5. Post-Approval Fundraising & CSR Readiness

Developed:
- Standard CSR proposals and donor pitch decks aligned with CSR norms
Advised on:
- Listing the NGO on India’s CSR portals
- Approaching companies with active CSR funding mandates

Results Achieved

Outcome	Details
80G & 12A Certifications Approved in 60 Days	NGO received official tax-exempt status
Qualified for CSR & Large-Scale Donor Funding	Enhanced appeal for corporate and private donors
Sustainable Fundraising Enabled	Donations now eligible for donor tax deductions
Financial Transparency & Audit Readiness	Internal compliance frameworks established
Global Funding Potential Unlocked	Strengthened credibility for FCRA and international donor applications

Conclusion & Key Takeaways

For any NGO aiming to raise sustainable, large-scale funding, 80G and 12A certifications are absolutely critical. However, securing them requires strong financial documentation, legal compliance, and expert navigation of Income Tax processes.

Sigma Solutions provided strategic end-to-end support, ensuring that the NGO: