Registration of an NGO in India
An NGO is a non-government organization with a charitable objective, for the betterment of
the society in general. It can be started as a Trust, a Society or a Non-Profit Company
[Section 8 Company], depending on the activity you wish to undertake.
In India, NGO is an umbrella term for all non-profit organizations including Trust, Society
and Section 8 Company. Other names for such not-for-profit organizations are "Sangathan",
"Sangh", "Sangam". Income tax exemption is available for all non-profit NGOs.
Laws in India applicable to an NGO
NGOs can be registered in India under any of the following laws:
a. Trust under Indian Trusts Act, 1882
b. Society under Societies Registration Act 1860
c. Section 8 Company under Companies Act, 2013
Why register an NGO in India?
Benefits
A registered NGO gains the legal status and becomes accountable for the funds received.
For instance, when an individual donates funds to a charitable trust, it is received under
the name of the organization and used for the trust’s activities. In an unregistered firm,
the assets can be received under anyone’s name and may be used for their own profit.
An organization that is registered as an NGO reinforces the ethical, social and legal
norms of our society.
The basic requirement for running an NGO is to have a bank account under its name. In
order to open an account, it is mandatory to be registered as a Trust, Society or Section 8
Company.
The registration of an NGO is necessary to seek tax exemption from the Income Tax
Authority.
Essential documents for online society registration & trust registration
Before a registered deed is delivered to an NGO, submission of specific documents is
required.
Trust Registration
For the trust registration, the following papers are mandatory:
A bill of electricity or water stating the address that needs to be registered.
The identity proof of at least two members of the company. The proof can be:
Voter ID
Driving License
Passport
Aadhaar Card
Once the payment for the registration is done, it takes about 8 to 10 days for online
registration to be completed under the Indian Trust Act – 1882. Before the deed becomes
valid throughout the country, the settler has to deliver a presentation at the registrar’s office.
On the scheduled date for registration, the Author of the Trust shall be present in the Register
Office for registration
Society Registration
For a society registration, the following papers are essential:
The name of the society.
Address proof of the office.
Identity proof of all the nine members which can be:
Driving License
Copy of Passport
Voter ID
Aadhaar card
Two copies of the Memorandum of Association and By-laws of the society.
Once the payment for the registration is done, it takes about 8 to 10 days for drafting the
MoA and By-laws of the Society. Thereafter it takes 21 to 30 days for the Society to be
registered.
Section 8 Company:
For a Section 8 company registration, the following papers are essential:
The name of the Company for approval.
Address proof of the office. It can be electricity or water bill or house tax receipt.
Identity proof of all the Directors which can be:
Driving License
Copy of Passport
Voter ID
Aadhaar card
The Memorandum of Association and Articles of Association of the Company.
Once the payment for the registration is done, it takes about 8 to 10 days for drafting the
MoA and AoA of the Society. Thereafter it takes about 2 months for the entire Company
registration to be completed.
Application for registration of an NGO:
You can register the society in the registrar office at a state level or in the district magistrate
office or Registrar of society local office, at a district level. The registration process is
different in each state. While submitting the application form, you have to also submit the
memorandum of association (MOA), all members consent letters, authority letter that are
signed by all the society members, the president’s affidavit in Rs.20/- stamp paper and also
the declaration given by all committee members stating that the society fund will be utilized
for only its object and aim. The duplicate of these forms to be submitted along with a nominal
registration fee. Here, the MOA need not to be submitted in stamp paper.
Many NGOs feel immune to all forms of taxation because they exist as a non-
profit entity, but this is just a myth. The following section talks about important compliances
that an NGO is required to do to prove its genuine in accordance to the NGO Laws:
PAN
After registration of NGO with respective Authority, the first thing is to apply for PAN of the
NGO. It is mandatory to apply for the PAN after registration of an NGO.
Registration under section 12A of the Income Tax Act
The registration of NGO under Section 12A is necessary for getting some benefits of
taxation. However, section 12A certificate is not a mandatory registration. The main reason
for getting this registration under section 12A is to get the benefit of exemption from the
Income Tax on the income of the NGO if all the rules and regulations laid down in this
section are fulfilled.
Registration under section 80G of the Income Tax Act
Even the registration under this section is not mandatory. However, to give the benefit of
50% or 100% exemption on the donations to the donors, NGO should get the registration
under section 80G of the Income Tax Act. It is indirectly an advantage to NGOs to raise
funds.
FCRA Registration
The NGOs get many opportunities to receive Foreign Funds for the NGO missions once
completing the NGO registration process. Post which the registration with the FCRA
department, Ministry of Home Affairs is essential. Without FCRA registration, NGO cannot
receive any kind of foreign donation or funds.
TAN
During the functioning of NGOs at any point of time, if NGOs become liable to remove the
tax from a source, it has to first apply for TAN.
GST Registration
If the NGO is providing services like research activity or consultancy work etc. and if the
gross revenue from such work crosses the basic exemption limit of GST, then NGO has to
first apply for the GST.
Professional Tax
Professional Tax is the liability of an NGO to deduct from the pay of an employee and
deposit to the Government. It is a state government thing and thus different states of India
having different rules and regulations for Professional Tax.
Retirement Benefit
Retirement benefits like Provident Fund, Gratuity, ESIC etc. are applicable to the NGO when
it develops and the size of employees is more than the prescribed limit in these acts.
Shops and Establishment License
According to the Indian NGO laws, if an NGO employs any individuals in their office to
carry out any work pertaining to the NGO, then the said NGO shall obtain a license under the
Shops and Establishments Act.
ANIMAL WELFARE ORGANISATIONS
Prevention of cruelty to animals Act, 1960 permits the formation of animal welfare
organization through section ((g) of the Act.
FINANCIAL ASSISTANCE FROM AWBI
Animal welfare organizations can approach Animal Welfare Board of India for recognition
and final assistance. There are certain guidelines for the recognition of an Animal Welfare as
an NGO.
There are two types of animal welfare organisations:
SPCA- society for the prevention of cruelty to animals
AWO- Animal welfare organisations in general
Both have different aims and objectives.
