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NGO is a non-government organization registration online. As the word denotes the organization which works for humanitarian and social science, it is a commonly independent entity. The Non-profit organization is a voluntary group or institution that works for social causes. As NGOs are commonly popular for the benefit of society at large, the work performed by NGOs is not limited to environmental advocacy, and social and human rights work. Sometimes the world's NGOs are used as civil society. NGOs play a vital role in International Development, aid and philanthropy. As of now NGOs are dependent on a variety of funding sources from private donation and membership dues to government contributions. NGOs provide technical and information expertise to government and international organizations on various international courses, often supplying local information unavailable to governments. NGOs may advocate on behalf of a specific policy such as banning landmines or debt relief. NGOs may also monitor the implementation of environmental regulation or human rights. This paper wants to draw the attention of the reader within the aspect of grant, recognition, registration, and regulation of the NGOs as to by what method and by what means they are funded and maintained. NGOs are recognized intrust, society and section 8 of companies under Companies Act, 2013. Some of the NGOs working in our country are as follows: -
Constitutional Provisions Associated with NGOsinIndia
TheconstitutionofIndiaalsoprovidespace forNGOsexpresslyorimpliedly. · Article19(1)(c) - Right to Create Association. · Article43 - This article highlights a state having an attempt to boost and promote cooperatives in rural areas. · Entry 28 in the Concurrent list- Charity & charitable institution, religious institution, religious funding. For Running Any Organization, there's a need for monetary assistance. So, the NGOs get assistance from individuals, Corporations, governments (Local, State, Central, Foreign), Companies, Charitable foundations from other CSR Funds. To encourage the benefactor activities in India, the government has given various exemptions in the Tax regime to NGOs. Two main registrations for taking exemptions are 12A and 80G has been incorporated in Income Tax 1961 by the Government. If the NGO has been registered, they have to be registered in Form 10A to claim the exemptions under section 11 and section 12. If NGOs and NPOs are not registered under section 12A, their all receipts would be Taxable for sure. But private or family trusts are not eligible to get an exemption under Section 12A.
Now the question is, under which laws are NGOs registered in India?
Classification of NGOs in India
NGOs are classified on the following grounds-
BY THE LEVEL OF OPERATION
BY THE LEVEL OF ORIENTATION
Tax exemption:
Registering the company as an NGO under the Companies Act, 2013 helps in claiming several taxation benefits by which NGOs are exempted from several taxes as a result of which it helps the company save money from tax and utilizing them in further projects.
Right to acquire assets:
When an organization is officially registered it then becomes permitted to acquire land and acquire liabilities and also get the permission of fixed assets under its common seal.
It is illegal for an unregistered organization to buy, sell and hold land anywhere.
Transfer of ownership:
As a corporate body and organization, transactions and engagements with the community will improve. The NGO can also sue or be sued to enforce its legal rights through its registered trustees.
Exemption on stamp duty:
Section 8 of the Income Tax Act provides companies as NGOs are exempted from stamp duty which results in more tax-saving methods for companies.
Protection from personal liberty:
One can buy, acquire and register the assets and a stake in the name of the NGO. This is a very well-known way of protecting by hand from unlimited liability for untoward occurrences such as bankruptcy, foreclosure judgment debt, or divorce.
No minimum share capital requirement:
For the functioning of an NGO independently no minimum share capital requirement is needed. NGOs can be directly funded with the charity done to them. That Means the NGO does not need a higher share capital to function independently.
Transfer of ownership:
Under the Income Tax Act, 1961 NGOs registered under the Companies Act 2013 are not restricted to claim the interest earned or to transfer their ownership.
Exemption on stamp duty:
Under the Income Tax Act, 1961 Section 8 companies as NGOs are exempted from stamp duty which results in much more tax-saving methods for the company. All the taxes saved through stamp duty are invested in the promotion of the objectives taken up by the company. Also, it helps in protecting funds for the company which as a result helps in increasing the productivity of the company and smoother functioning.
Corporate entity:
As a corporate body one’s organization’s transactions and engagements with the community will improve.
Perpetual Succession:
This means an NGO has an unlimited lifetime and it can carry on existing even if the founder or trustee dies or leaves the NGO. The organization's continuation will only see if it is formally wound by the order of court along with other benefits that may allow perpetual succession.
Structured financial plan:
Having an NGO can bear tax-free mechanism for actions one is carrying on under the registered NGO.NGOs are considered tax-exempt and non-Profit. One can develop a structured financial plan that allows the organization to do business which is devoid of tax liabilities.
Stability of entity:
The destruction of one’s organization can suggest that there is responsible and effective leadership in place. the public will perceive the same as being stable than an unregistered organization. Government, political parties, donor agencies, charity organizations, financial institutions and other NGOs will want to partner with a registered body to further common objectives.
Admission to credit:
Registering NGO can afford access to credit from financial institutions and lenders. One can use a loan facility to promote the organization's activities, acquire land, and finance a mortgage. or fixed assets. the bank will see proof of registration with condition precedent to giving a loan.
Opening bank account:
Opening a corporate account with a bank for the NGO may signal the fact that it is transparent. Government, some private persons, donor agencies and other NGOs will not be comfortable writing a one hour check for an organization in his personal name. a bank account for the NGO would signal its corporate existence and its readiness to receive donations .One need to provide proof that his organization is restored to be able to open an account with a bank.
Name preservation:
Once an organization is restored no one can use the same name or name similar to it throughout India. This has the benefit of protecting the corporate image and name from unauthorized use.
Types of NGO registration
In India an individual is free to perform social activities without setting up an organization or entity. However, if an individual wants to form a group that involves participant’s resources and activities, it is essential to have proper management in place.
Procedure for NGO registration
Based on types of NGO registration an application should follow various laws and procedures prescribed in the respective act.
Now let us look into the detailed process of registration of these NGOs falling under the different classes-
As a Trust
The procedure for trust registration involves the following mentioned steps
An individual or group of individuals are eligible to register a section 8 company if they hold the below-mentioned intentions or objectives
Other conditions to be fulfilled for registering a section 8 company are:
NGO registration process as a Section 8 company (in accordance with the provisions of the Companies Act, 2013)
The applicant of Section 8 company has to fill in as per their choice to reserve the same. Section 8 company shall mandatorily make use of the following in their name-
INC -9 includes the declaration by the First director or subscriber.
There is no need for minimum paid-up capital. That means a company can be formed without any share capital and required funds can be brought from donations or subscriptions.
2. TAX BENEFITSThere are various exemptions and compensations provided to the company as well as to the donors.
3. ZERO STAMP DUTYNo stamp duty is applicable on the incorporation of section 8 company. As the company is exempted from payment of stamp duty for registration.
4. SEPARATE LEGAL IDENTITYThe company has a separate legal identity and a different personality from its members. The company also has perpetual succession.
5. CREDIBILITYSection 8 companies are more credible compared to other forms of charitable trusts or organizations. They are governed by the central government and are required to file annual audits mandatorily.
6. EXEMPTION TO DONORSThose donating to the NGOs are eligible to claim tax exemption under sections 12A and 80G of the income tax act.
According to the Societies Act 1860 world, selecting a name for the society is essential to keep in mind that the name should be unique and non-identical. Also, the name proposed by the applicant must not suggest the patronage of any state government or Government of India or attract the provision of Emblem and Names act, 1950.
Ø an oath Commissioner
Ø Gazetted officer
Ø Advocate
Ø Notary Public
Ø Magistrate first class with their complete address and official stamp
Ø Chartered Accountant
In the case of society, the deputy registrar or registrar of the state is registering authority. In case of a trust, the deputy registrar of the prescribed area is the registering authority. In the case of a Section 8 company, the regional director or registrar of the companies are the registering authority.
Minimum number of members-In the case of society, it is not much preferred.
In the case of a trust, it is not much preferred.
In the case of a Section 8 company, it is mostly preferred
Transparency in working-
In the case of society, transparency in working is not much.
In case of trust, having transparency in working is a bit shady.
In the case of Section 8 companies, transparency in working is high because of online availability
Annual compliance requirement-
In the case of society, the annual filing of the list of names, addresses, and occupations of members of the managing committee of society is mandatory with the registrar of society.
In Case of trust, few annual compliances are Required depending upon the type of trust such as a public trust or private trust.
In case of Section 8 Company, annual compliances of filing of annual returns and filing of accounts are mandatory with the registrar of the companies.
12 A registration is just once registration which is granted by the income tax department to trust and other not for profit organizations. The aim of the registration is to be exempted from the payment of taxation. 12 A registration is generally applied for immediately after incorporation. Primarily, the section Reveals that if the NGOs are registered then they get rebates from the income tax & others for paying taxes.
What is 12 A registration within the aspect of NGO?
Any NGO which is registered with 12 A eligible to assert a whole tax exemption from taxation department in other words it can be said that only those NGOs are registered under 12 A will avail for exemption from taxation not otherwise. There are certain limitations & categorization who are eligible for 12 A registration as each organization cannot get 12 A registration. So, 12 A registration is obtainable for all non-profit entities. For example, only Charitable Trusts religious trusts societies and companies that come under Section 8 is eligible for 12 A.
The income received within the NGO is going to be free from the charge of income takes NGOs that receive grants as funds from domestic and international sources These agencies Provide grants to NGOs which have obtained registration under 12 A.
An 80 G certificate is issued by income tax department to a non governmental organization such as charitable trust or a Section 8 Company If an NGO is registered under section 80 G then that person or the organization making a donation to the NGO will get a deduction of 50% from his taxable income.80 G certificate is granted to encourage the donors to donate funds into such non-profit organizations
SignificanceIf an NGO gets registered under 12 A and 80 G then only it’s applicable for any government funding.
One becomes entitled to claim a tax deduction by using the receipt of a donation he gets. So, person can use 80 G registration for NGO to reduce the amount he has donated to a specific Organization from his total taxable income. From the donor perspective,if anyone donates or contributes any monetary assistance to NGOs who have a license of 80G is eligible to claim deductions of 100% or 50% depending upon the fund.
The Funds which are eligible to claim 100% exemption are as follows: -
National Defense Fund
· Prime Minister's National Relief Fund
· An approved educational university institution of national immanence
· Fund set up by any a state government for the medical assistance to the poor people
· National Illness Assistance Fund
· National State Blood Transfusion Council
. National Trust for Welfare of Persons with Cerebral Palsy, Autism, Mental
Retardation and Multiple Disabilities
· Lieutenant Governor's Relief Fund or chief minister's Relief Fund with respect to any state or union territory.
Note:-The institutions which are availing of benefits under sections 12 A and 80G had to revalidate or revive their registration under ever mentioned sections before August 2020 to continue to obtain the benefits.
After 1st April 2021, upon applying for revalidation of Registration, and order granting. The revalidate registration is passed within three months.
The revalidated registration under section 12A and 80G is valid only for a period of 5 years only after which it needs to be revalidated again. The re-application after 5 years has to be made at least 6 months before the expiry of the validity period of registration. After receiving the revalidation of the registration application under 10A, the Principal Commissioner of Income Tax or Commissioner of Income Tax will pass an order of granting approval in written Form No 10AC and issues a 16-digit Unique Registration Number to the applicant.
NGO Darpan is a website where any NGO which is registered (in NGO Darpan as well as under 12A and 80 G) that can avail for government funds/ Grants. This is an online process where there is no chance of corruption, misfortune and misleading activity. Here grants are provided by the ministry and governments.
Basically,NGO Darpan is the platform to create healthy relationship between
Non-GovernmentalOrganization/VoluntaryOrganization&Government
Of India. It isinitiativeofPrimeMinister Office.
This portal was managed and controlled by NITI (National Institute for Transforming India) Ayog. This is a fully free facility offered by NITI Ayog in association with NIC (National Informatics Centre) to bring about greater partnership & relationship between Government and Voluntary Organization For transparency, efficiency and accountability. This is a totally free facility offered by the above-mentioned authority.
ThemaintenanceofNGODarpanhasbeenstartedfrom1stJanuary2015by NITI Ayog
Facilities provided by NGO Darpan
It provides details of existing voluntary organizations and non-governmental organizations all over India
Itprovidesdetailsoftheschemesofparticipatingministries/departments/government bodies offering grants to voluntary OrganizationsandNon-GovernmentalOrganizations
It is mandatory to get registered with NGODarpantogetapprovalforgovernmentgrantsandfunding under the government scheme for sure. There is also a proper certificate provided after registration in NGO Darpan but there are some mandatory steps for getting an ID certificate for NGODarpan. New schemes provided by the government will be emailed to the registered NGO. Further one can get information of Voluntary Organizations and Non-Governmental Organizations for tying up and other benefits also for providing aid to the general public.
But it must be noted that till now not any single individual has registered here, which means to say that an individual cannot get registered in NGO Darpan.
As of nowMorethan90,000NGOhasbeenregistered inNGODarpan
· RegistrationCertificate of NGO
. Scanned copy of Aadhar card and pan card of members (Details of at least
3 members of the organization.)
· Website oremailofNGO
· AddressofNGO
· ContactnumberofNGO
· Area Business
· Pan number of NGO
· Source Of Funds
· Any Grant Available Previously
· Details of FCRA (Foreign Contribution), if any
The Benefits of NGODarpancanbetaken by trust, Section8 Companies, and society-NGO. Itmustbecleartopeople that registration of NGO & registration on NGO Darpan both are different processes. For availing NGO Darpan any NGO and Voluntary Organization Must Be Registered Previously.
Conclusion
This paper tried to give critical as well as basic knowledge regarding non-Governmental and
Voluntary organizations. So, for recognition of Non-Governmental Organization and Voluntary Organizations, there must be a registration process followed which is being provided in Section 12 A and 80 G. This paper also tried to spread some light on the procedure,importance, regulatory bodies, controlling authority of NGOs and VOs; as NITI Ayog controls NGO Darpan and every NGOs and VOs have to register for availing government funding.
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