{"id":31399,"date":"2021-06-02T12:53:48","date_gmt":"2021-06-02T07:23:48","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=31399"},"modified":"2024-09-27T12:08:00","modified_gmt":"2024-09-27T06:38:00","slug":"ngos-failing-to-meet-these-requirements-shall-be-in-trouble","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/ngos-failing-to-meet-these-requirements-shall-be-in-trouble\/","title":{"rendered":"NGOs Failing To Meet These Requirements Shall Be In Trouble"},"content":{"rendered":"\n<p class=\"has-drop-cap\">NGOs, trusts, &amp; charitable organizations need constant funding to operate seamlessly. Numeral tax exemptions are given both to the<a href=\"https:\/\/corpbiz.io\/ngo-registration\"><strong> NGOs<\/strong><\/a> and the donor to promote donations &amp; to encourage activities for good cause. Furthermore, to ensure access to such exemptions, these institutions must register u\/s 80G &amp; 12A of the IT Act. This registration was considered to be valid in perpetuity. <\/p>\n\n\n\n<p>Some changes have been\ninculcated in this system via the Finance Bill 2020. While the exemptions are\nstill accessible, re-registration u\/s 80G &amp; new registration u\/s 12AB are\nnow required. Furthermore, a new procedure has been introduced to claim CSR\nfunding too. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/ngos-failing-to-meet-these-requirements-shall-be-in-trouble\/#1_Form_CSR-1_for_CSR_Funding\" >1. Form CSR-1 for CSR Funding<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/ngos-failing-to-meet-these-requirements-shall-be-in-trouble\/#2_Re-registering_Under_Form_10A\" >2. Re-registering Under Form 10A<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/ngos-failing-to-meet-these-requirements-shall-be-in-trouble\/#3_New_Registration_us_12AB\" >3. New Registration u\/s 12AB<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/ngos-failing-to-meet-these-requirements-shall-be-in-trouble\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Form_CSR-1_for_CSR_Funding\"><\/span>1. Form CSR-1 for CSR Funding<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>CSR, aka Corporate Social\nresponsibility funding, is when the said entities can avail funding from\norganizations to execute their operation such as environmental protection or\nstriving to introduce positive changes in society. <\/p>\n\n\n\n<p>Moreover, w.e.f 1 April 2021,\nNGOs have to register via a Form CSR-1 in the MCA\u2019s portal to be able to obtain\nsuch funds. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Eligibility about the filing of form CSR-1<\/h3>\n\n\n\n<p>a. Should be one of the following the institutions:<\/p>\n\n\n\n<ul>\n<li>A company set up u\/s 8 of the Act, or a registered public trust\nor society u\/s 12A &amp; 80A of the IT Act, 1961. <\/li>\n\n\n\n<li>A Section 8 entity or a registered society or a trust\nestablished by the State or Central Government. <\/li>\n\n\n\n<li>Any company founded under a State legislature or an Act of\nParliament<\/li>\n<\/ul>\n\n\n\n<p>b. Should possess a legit registration u\/s 80G and 12AA\/12AB as of the date of application filing. <\/p>\n\n\n\n<p>If you are establishing a new NGO, you have to register u\/s 12AB &amp; 80G of the <strong><em>Income Tax Act<\/em><\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/The_Income-tax_Act,_1961\"><strong><em>[1]<\/em><\/strong><\/a><\/sup> before availing of CSR funding. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Mandatory Documentation for CSR filing<\/h3>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/06\/Mandatory-Documentation-for-CSR-filing.png\" alt=\"Mandatory Documentation for CSR filing\" class=\"wp-image-31406\" width=\"486\" height=\"486\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/06\/Mandatory-Documentation-for-CSR-filing.png 1000w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/06\/Mandatory-Documentation-for-CSR-filing-150x150.png 150w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/06\/Mandatory-Documentation-for-CSR-filing-300x300.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/06\/Mandatory-Documentation-for-CSR-filing-768x768.png 768w\" sizes=\"(max-width: 486px) 100vw, 486px\" \/><\/figure><\/div>\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Re-registering_Under_Form_10A\"><\/span>2. Re-registering Under Form 10A<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Non-Government Organizations u\/s <strong><a href=\"https:\/\/corpbiz.io\/80g-and-12a-registration\" title=\"12a and 80g registration online\">80G &amp; 12A<\/a><\/strong>\/12AA have the benefit of tax exemption. Moreover, to ensure access to such benefits, the NGOs are needed to re-register themselves with the IT department via a Form 10A. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Amendment to Section 80G<\/h3>\n\n\n\n<p>When a donor contributes to\ncertain charitable avenues and relief funds, they can claim income deduction\nu\/s 80G of the Act. This exemption is accessible only when the donation is\nrouted to NGOs registered u\/s 80G. Moreover, the Finance Bill 2020 has made some\nspecific changes to the said section that will come to effect from 1 June 2021:\n<\/p>\n\n\n\n<ul>\n<li>The Principal Commissioner is to whom an entity must apply to be\nrecognized u\/s 80G. Further, they will possess the right to grant the\nregistration. <\/li>\n\n\n\n<li>An obligation to render a donation\u2019s statement received has been\nimposed on the entities, failure of which might lead to a penalty. Furthermore,\nin case of non-availability of the statement, the donor will dissolve the\nrights to claim the tax deduction. <\/li>\n\n\n\n<li>Furthermore, the notion of perpetual registration has been put\nout of the equation, and entities from now are required to seek renewal every\nfive years under this section.<\/li>\n\n\n\n<li>A provisional registration possessing 3 years validity can be\ndemanded by charitable avenues that haven\u2019t commenced their charitable\nactivities. Meaning- The charitable avenues are awarded registration on the\nbasis of details submitted before the CIT (exemptions). The registration is\naccorded once the commissioner is satisfied with the legitimacy of such\navenues. The Finance Bill proposes the provisional registration for the three\nyears will be accorded to new entities which is yet to start their operation. <\/li>\n<\/ul>\n\n\n\n<p>To get registered u\/s 80G, form 10A as cited above must be submitted with the Principal Commissioner. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/finance-act-2020-changes-in-gst\/\">Finance Act 2020 \u2013 Changes in GST<\/a><\/mark><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Documentation to be submitted for Form No. 10A<\/h3>\n\n\n\n<ul>\n<li>Where an applicant is created,\nunder an instrument, self-certified of such instrument creating the applicant; <\/li>\n\n\n\n<li>Where the applicant is created\nother than an instrument, self-certified copy of the document highlighting the\nestablishment of the applicant; <\/li>\n\n\n\n<li>self-certified copy of the registration\nwith ROFs or ROCs &amp;Societies or Registrar of Public Trusts; <\/li>\n\n\n\n<li>self-certified copy of\nregistration under FCRA, 2010, if the applicant holds a registration under such\nAct; <\/li>\n\n\n\n<li>Self-certified copy of\nprevailing order conferring approval under clause 23C of section 10; <\/li>\n\n\n\n<li>self-certified copy of the\napplication rejection\u2019s order for grant of approval u\/c 23C of section 10, if\nany. <\/li>\n\n\n\n<li>Proof of business undertaking\nas per the provisions of subsection (4) of section 11.<\/li>\n\n\n\n<li>Note on the activities of the\napplicant.<\/li>\n\n\n\n<li>Self-certified copies of the\nannual accounts of preceding business as per the provisions of sub-section (4A)\nof section 11<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_New_Registration_us_12AB\"><\/span>3. New Registration u\/s 12AB<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>All charitable organizations\nare now required to freshly register under Section 12AB. This is to get\nbenefits provided under Sections 11 and 12 with effect from 1 April 2021.<\/p>\n\n\n\n<ul>\n<li>If you are an NGO earliar registered under the Section 12A\/12AA,\nyou required to register under Section 12AB within 3 months. <\/li>\n\n\n\n<li>Moreover, if you are an NGO not registered under Section\n12A\/12AA you required to apply for registration under the Section 12AB at least\na month before started of the previous year relevant to your assessment year.<\/li>\n\n\n\n<li>Additionally, for new registrations, provisional registration\nfor 3 years from assessment year from which registration is sought will be\ngiven.<\/li>\n<\/ul>\n\n\n\n<p>All these amendments have\nprovoked concern among NGOs as they theake compliance process more complex than\never. If you have an NGO, you need to understand the said changes inculcated by\nthe Finance Bill to stay compliant. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>NGOs, trusts, &amp; charitable avenues have provisions related to tax exemptions in India. These are given because of the non-profit nature of their work. New registrations have been made compulsory for these institutions to claim these exemptions as of 1 April 2021.&nbsp;For any clarification on this topic, feel free to contact <a href=\"https:\/\/corpbiz.io\/\"><strong>CorpBiz\u2019s<\/strong><\/a> expert via commenting in the message box. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/approach-ngo-registration-in-india\/\">How to approach NGO Registration in India? Forms &amp; Features <\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>NGOs, trusts, &amp; charitable organizations need constant funding to operate seamlessly. Numeral tax exemptions are given both to the NGOs and the donor to promote donations &amp; to encourage activities for good cause. Furthermore, to ensure access to such exemptions, these institutions must register u\/s 80G &amp; 12A of the IT Act. This registration was [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":31405,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[1789],"acf":{"service_id":"407"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":2948,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/31399"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=31399"}],"version-history":[{"count":8,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/31399\/revisions"}],"predecessor-version":[{"id":66482,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/31399\/revisions\/66482"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/31405"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=31399"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=31399"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=31399"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}