The NGO should not have any income which are not exempted, such as business income. If, the NGO has business income then it should maintain separate books of accounts and should not divert do read more
Private: NGO/Society Formation
There are three types of NGOs in India - Trust, Society and Section 25 Companies Act 1956. Before registering the Trust or Society, you should know about the differences between both of them. Further, the area of operation of the NGO can be either state level or national level.In case of society registration, for registering the NGO at National Level, you will have to provide the Address proof of Eight Member's (DL | Copy of Passport | Voter ID) along with four photographs of each member. You will have to provide One Member (President - Treasurer or Secretary - Treasurer) from Delhi and another Seven Members can be from any seven different states. Besides these formalities, you are supposed to give two sets of Memorandum of Society. But the major drawback in society is that you cannot keep family members in society whereas in trust, you can keep family members. In maximum of the cases, while registration of society, property papers are also demanded and this registration is a time consuming process. It takes a time period of 2 months or even more time. In case of objection, the time period of society registration is further extended to more time.
For trust registration at all India Level, you will have to provide the four photographs and address proofs of three Member's (DL | Copy of Passport | Voter ID). You will have to provide Two Members (President - Treasurer or Secretary - Treasurer) from Delhi and another two members can be from any states. Further, you must arrange the pan card copies and residential proofs of all the members which is required during bank account opening. You can add many volunteers in your trust as you wish. You cannot keep more than 21 board members in your non government organization. Generally, an NGO is made for doing philanthropic activities or to apply for corporate funding or for availing international funding or for applying government funding after 3 years. As per the current government norms, all the companies whether it is public,private, nidhi, producer etc. which are showing net profits of more than 5 crores in any financial year, according to CBDT limit, they are supposed to donate 2% of their net profits to social welfare organizations. An ngo can avail tax exemption by getting itself registered under section 12a and 80g of Income Tax Act 1961. Most of the big corporate companies make donations to NGOs. Some corporates make their owns NGOs and for getting tax benefits, they route out the funds to their NGOs from their companies and to also comply with CBDT limit. CBDT stands for Central Board of Direct Taxes. If the work of NGO is genuine and its records are proper including annual reports, minutes book, audit report, it can avail funds in any of the sectors after 3 years in government and in some conditions before also. The funds of the trust shall never be utilized for personal gains but for doing charitable activities. You can keep family members in trust unlike society. But it would be much better if all the members are not from the same family. You shall keep at least one member from outside also. Besides these formalities, you are supposed to provide two sets of Memorandum of Trust while applying for registration, one deed is submitted at sub-registrar's office and other deed is provided to the settlor member of ngo. Via section 80g, whatever donations will come to ngo's account, the donor will get 50% tax rebate from his/her taxable income of the donated amount. Inspite of the fact, there are various acts for doing philanthropic activities namely Indian Trust Act 1882, Societies Registration Act 1860, Section 8 Companies Act, Charitable and Religious Trusts Act 1920, Sikh Gurdwara Act 1925, Trustees and Mortgagees Powers Act 1866, Wakf Act 1995, Indian Trustees Act 1866, Religious Endowment Act 1863 but maximum of the the Indian citizens form trust or society.In case a situation arises when a trust is dissolved, the funds of the ngo is never distributed among the trustees, instead the assets are transferred to a similar ngo having same category of objects. The board members may pay honorarium to their volunteers who wish to do something good to the society by contributing their time to the non government organization. A trustee cannot hold office of trust if he dies or he gives resignation or he is found involved in doing some detrimental activities to the ngo of he is terminated by the other board members by passing of resolution or upon expiry of his or her nomination. Generally, quarterly one meeting is conducted and there are seven types of registers are maintained in any ngo namely - annual general body meeting register, general body meeting, notice, attendance register, notice register, letters dispatch register, letters received register and acknowledgement receipt register. As the name suggests, the annual general body meeting register is for signing of board members once a meeting is conducted after the end of financial year.
The total income of an assessed, being a non –resident Indian, includes-
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