The article expresses the author’s perspective on the legal compliance of NGO laws in India. Non-Governmental Organization (NGO) or Non-Voluntary Organization (NVO) is an acronym for Non-Governmental Organization or Non-Voluntary Organization. Non-governmental organizations come in a variety of shapes and sizes, including trusts, societies, trade unions, cooperative societies, and section 8 corporations. Non-profit organizations were given regulatory authority by state and federal government agencies. Under section 8 of the Companies Act, 2013, the NGO hierarchy in states includes the Charity Commissioner (for trusts), Registrar of Societies, and Registrar of Companies. The Income Tax Department and the Ministry of Home Affairs are the various departments and regulatory bodies for NGOs that receive foreign contributions. If you are looking for NGO online registration, you can book a consultation with the NGO registration panel at MUDS Management.
Different laws for NGO In INDIA
In India, the following laws would apply to NGO registration:
TRUST: It is a public charitable institution that is registered with the Charity Commissioner’s Office, which has jurisdiction over the entire state. The Bombay Public Trust Act, 1950, was adopted by Maharashtra and has since become a model for other states. The Indian Trusts Act of 1882 is the law that governs trusts.
Societies: States have adopted their versions of the model Societies Act, 1860, according to the Societies Registration Act, 1860. Society is regarded as a self-contained unit of organization. It has a large membership that elects a governing body to manage society’s affairs on a regular basis. Members hold the body responsible. The Act allows for the registration of various types of societies, including:
The Companies Act of 2013 defines a company as a legal entity. The Act allows for the formation of “Section 8 companies.” Section 8 companies, according to the Act, are those formed for the purpose of art, religion, charity, or other useful objects. Section 8 Company’s internal governance is similar to that of a society. The members of the committee or governing council are chosen by the Charitable Company’s members. It is possible to dissolve a section 8 corporation. The registration process takes time and necessitates the submission of a memorandum of association and articles of association to the ROC (registrar of companies).
A Trade Union is defined as a temporary or permanent combination formed to regulate and control the relations between employees and employers, according to the Trade Union Act of 1926.
The multi-State Co-operative Societies Act of 2002 replaced the previous Act of 1984. Both main and federal cooperatives are required to comply with the Act.
NGO Rules and Regulations
The following are some of the ngo rules and regulations:
Permanent Account Number (PAN) – A PAN is a one-of-a-kind alphanumeric combination assigned to all legal entities for the purpose of identifying them under the Income Tax Act of 1961. The national identification number is the PAN number.
The Tax Deduction and Collection Account Number (TAN) is the tax deduction and collection account number. It is a ten-digit alphanumeric number that all individuals responsible for deducting or collecting tax (TDS) at source must obtain. The TAN number must be quoted in the following locations:
- A challan for depositing the tax deducted at source,
- A certificate for the tax deducted,
- All returns are filed in relation to the tax deducted at source, and so on.
Tax deductions are available for non-profit organisations that comply with the law
The following are the various tax deductions available for NGO compliance:
Donations under the age of 80 G are deductible: Donors can deduct contributions to trusts, societies, and businesses that are registered under section 8. If the funds are from the government, they are entitled to a 100% deduction; if the funds are from non-government entities, they are entitled to a 50% deduction. It is a requirement for an NGO to obtain Section 80G registration in order to be eligible for an 80G deduction.
The Foreign Contribution (Regulation) Act of 2010 governs the reporting of foreign contributions. All non-profit organisations in India, such as public charitable trusts, societies, and Section 8 companies, must obtain registration before accepting any foreign contributions. They must register with the government at the national level.
Registration under section 12A- As per the Income Tax Act, 1961 such registration helps you get the exemption on the income of the Trust. Such registration is not compulsory. The registration is valid only for 5 years, and it has to be renewed after every 5 years.
If a non-profit organisation is involved in relief work, it is exempt from customs duty. Importing items such as food, medicine, clothing, and blankets are completely exempt. The research equipment and components intended for research institutes are also exempt from the tax.
The FCRA Return can be submitted to the Ministry of Home Affairs either annually or quarterly. Even if no foreign contribution is received, the return is required to be filed. The return must be filed using Form FC-4, which includes the organization’s charitable activities. The FCRA authorization and the CA certificate must be included in the return.
What are the Penalties to be charged in case of Non-Compliance?
The Ministry of Corporate Affairs has the authority to impose penalties in the event of non-compliance with the procedures.
The following are the penalties that will be imposed:
- If it is discovered that the organisation is working falsely or in a manner that is contrary to the organization’s object, the Central Government may refuse the organization’s permit.
- The Institution’s administration will be liable for a fine that will not be less than ten lakh rupees and can be increased to one crore rupees.
- Each official, including the organization’s top executives, who is in default will face detention for a term that could range from five to twenty-five lakh rupees, or both.
- If it is discovered that the organization’s issues were directed falsely, every official in default must be subject to activity under Area 447.
It can be concluded that NGO in India must comply with the law. Section 8 Annual Compliance must be followed by the NGO, such as the Company. Annual compliance is required for Section 8 businesses. The Income Tax Act, for example, plays an important role because it allows donors to deduct their contributions. For Non-Governmental Organizations, donations from foreign contributions must be registered as foreign incomes/donations. Other PAN and TAN registrations must be completed. Because the Income Tax Act of 1961 states that “no income is exempt unless provided,” donations are not always fully exempt. For NGO registration in India book consultation with our experts. They will guide you regarding the NGO online registration in India.