NGO/Trusts Registration & Donations
Tax free Ngo/Trust Setup
The charitable institution or NGO/Trust should obtain a registration under the Income Tax Act for claiming tax exemption. Which form is applicable for applying for a registration under the Income Tax Act? The application for registration should be in Form No. 10A by the NGO/ trust or charitable institution.
Indian/ Foreign CSR
Entities need to provide the following details:
Nature of the entity (type of organization).
CIN (Corporate Identification Number) or registration number.
Date of incorporation, address, and email ID.
PAN (Permanent Account Number) of the entity.
Details of directors, trustees, or authorized representatives.
DIN (Director Identification Number) and DSC (Digital Signature Certificate) of the signing director.
Certification by a practicing professional.
International Bank Account Opening
you will need to provide proof of your identity and other documents. You can open a virtual international bank account too. Contact us if you wish to open an international bank account.
Donations
Legal and Financial Advice to NGOs/Trust/Section 8 Company
According to the local laws and regulations of most countries, all registered NGOs/trusts are required to maintain a system for recording and submitting all types of financial transactions made by them for the purposes of implementing projects and running their organization. Since finances are a crucial part of organizational management, it is always a better idea to maintain a ‘Financial Policy’ for following procedures to keep the accounting system effective, transparent and easily manageable. Non-Governmental Organizations (NGOs) have a vital role in tackling social, economic, and environmental issues worldwide. Even with their commendable goals, proper financial management frequently poses a significant obstacle for NGOs. Effective financial practices not only guarantee sustainability but also foster trust among donors, stakeholders, and beneficiaries
The legal framework in India for NGOs/Trust offers a structure for their registration, operation, and financial resource utilization.
Payment gateway donations
A payment gateway for donations is a service that allows organizations to receive donations online. Some popular payment gateways for donations include Donor box, Authorize.Net, PayPal, and PayU. Contact if you are interested.
35AC For NGO TRUSTS
35 AC: Tax Exemption
Introduction
As we already know that an NGO can avail income tax exemption by getting itself registered and complying with certain other formalities, but such registration doesn’t provide any benefit to the persons making donations. The Income Tax Act has certain provisions which offer tax benefits to the “donors”. All NGOs should avail the advantage of these provisions to attract potential donors. Section 35AC is one of such sections.
Registration u/s 35ac
The Central Government approves certain NGOs and notifies them as eligible for project or schemes for the purposes of section 35AC. If an NGO succeeds in getting such an approval for its projects, then it stands a very good chance of mobilising funds from the corporate and the business sector. Business houses making contribution to such approved projects are allowed the benefits of deducting such contribution as expenditure.
National Committee
The Central Government has constituted a National Committee to identify projects and schemes to be notified under section 35AC, such committee normally consists of eminent persons. All NGOs are entitled to apply to the National Committee to get its projects or schemes approved.
Section 35AC of the Income Tax Act, 1961, was introduced in 1992 as a means to promote social welfare activities and provide tax benefits to businesses that undertake such projects. The section provides a tax deduction to the tune of 100% of the amount spent by a company on specified social welfare projects.
Certificate to be issued to donor
All approved NGOs are required to issue a certificate to the donor for all contributions and receipts under section 35AC. The certificate is to be issued in Form 58A.
This certificate will enable the donor to claim exemption from its taxable income. Further, the NGOs should also send an Annual Report to the National Committee indicating the progress of the work relating to the project/scheme and the following informations in respect of each contributor:
- name of the contributors and their addresses.
- PAN.
- amount of contributions.
- the project/scheme for which the contribution is made.
- total amount of contribution received during the year.
- total cost of the project approved by the National Committee.
Such Annual Report should reach the National Committee by 30th June, following the financial year in which the amount is received.