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The registration under section 12a lays the foundation for tax exemptions that can be enjoyed by the charitable trust or ngo in India. It provides exemptions on any income generated through donations and other sources where such money is used for public good. This status will allow an ngo to function freely without many worries in terms of finances and thus invest more efforts in the areas of education, healthcare and other welfare programs. There are stringent rules under the provision which demand maintaining of complete records in all matters.
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