NGO:

When group of peoples wants to serve society and to do social welfare activities, then they need an organisation which has a separate legal entity to represent them all as a community. These organisations can be in the form of Trust/Society/AOP/ Section 8 company.

As observed by us, many people incorporate these legal entities but fails to do the regular compliances that are mandatory in nature to keep the status of that NGO in active form. Further, in many cases these NGO’s are created but they are inactive form due to shortage of funds. In this article, we will cover both issues.

Compliances That Must Be Done To Keep NGOs in Active Stage:

• Renewal of Society Registration with in the given time Period

In case of Society, its registration is given for a specified time period generally 5 Years. Every Society is required to renew the registration within specified time period. If registration is not renewed then it may create problem for the governing Body.

• Mandatory to conduct Board Meeting and General Meeting

As per by-laws of every society, they are bound to conduct Board meeting and general meeting on the regular intervals. If they default in complying with law requirement then governing body is liable for this and they may be penalised for such default.

• Conduct of Financial Audit by CA on Annual Basis and Filing of ITR, audit Report Etc.

Every NGO is required to get their books of accounts audited on annual basis from a Practising Chartered Accountant and has to file NGO Income Tax return. If NGO is registered under Section -12A and 80 G of Income Tax Act, 1961 then they are under obligation to file their Tax audit report on or before the specified due date, otherwise their exemption may be withdrawn.

• Submission of Audit Report and Annual Governing Body List with Registrar

Every Society is under obligation to submit annual Audit Report and updated Governing body detail with the registrar. In case of delay, Society can be penalised which may lead to cancellation of registration also.

• Maintaining of proper Records of Event Organised for Social Welfare Activities and expenditure incurred on these events

NGO must maintain a proper record of all activities done during the year in the form of pictures etc. This step helps in getting Income Tax Benefits and raising more funds from Society and Government.

Steps That Can Be Taken To Raise Funds for NGOs:

• Register with NGO Darpan – Niti Aayog Registration

If you want Government funding in your NGO then it is mandatory to get Niti Aayog Registration with NGO Darpan. After Niti Aayog Registration you can apply for Government funding.

• FCRA Registration

If you want donation from foreign then it is mandatory to get FCRA Registration. After FCRA Registration there are many other compliances which must be done otherwise your registration will be cancelled.

• Apply for Section -12A and 80G of Income Tax Act, 1961

If you want exemption under Income Tax then your NGO must be registered under Section -12A and 80G of Income Tax Act, 1961. If your NGO is not registered under these sections then no body will be ready to give donation to your NGO.

• Mandatory Registration with MCA for Getting CSR Funding

If you want to get CSR Funding in your NGO then you must register your NGO with MCA by filing Form CSR-1. After that you can go for CSR Funding.

Disclaimer: This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error

You might be interested in:

IPC and CRPC Laws under GST

TDS Rate Applicable for FY 2021-22 

All You Need To Know About Turnover Limit For Tax Audit

Mandatory Fields a GST Invoice Should Have

GSTR 9 Annual Return – Who Should Be Filing, Due Date, Late Fees and Penalty