{"id":38149,"date":"2021-11-24T15:06:16","date_gmt":"2021-11-24T09:36:16","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=38149"},"modified":"2024-09-27T11:49:32","modified_gmt":"2024-09-27T06:19:32","slug":"new-registration-compliances-for-ngos-as-per-finance-bill-2020","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/new-registration-compliances-for-ngos-as-per-finance-bill-2020\/","title":{"rendered":"New Registration Compliances for NGOs as per Finance Bill 2020"},"content":{"rendered":"\n<p class=\"has-drop-cap\">In the past time, the\ngovernment had a more resilient and moderate approach toward NGOs. However, in\nrecent times, the government has reconstructed by opting more stringent system.\nThrough the Finance Bill 2020, necessary changes came into force where\nre-registration under Section 80G and new registration under Section 12AB are\nnow required. Also, a new procedure has been put in place to claim CSR funding\ntoo. This write-up will pen down the new registration compliances for NGOs as\nper Finance Bill 2020.<\/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\/new-registration-compliances-for-ngos-as-per-finance-bill-2020\/#Understanding_the_New_registration_compliances_for_NGOs_as_per_Finance_Bill_2020\" >Understanding the New registration compliances for NGOs as per Finance\nBill 2020<\/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\/new-registration-compliances-for-ngos-as-per-finance-bill-2020\/#1_New_Registration_Compliance_for_NGOs_Under_Section_12AB\" >1. New Registration Compliance for NGOs Under Section 12AB<\/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\/new-registration-compliances-for-ngos-as-per-finance-bill-2020\/#2_Re-registering_the_NGOs_Under_Form_10A\" >2. Re-registering the NGOs Under Form 10A<\/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\/new-registration-compliances-for-ngos-as-per-finance-bill-2020\/#3_New_Registration_compliance_for_NGOs_under_Section_80G\" >3.&nbsp;New Registration compliance for NGOs under Section 80G<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/new-registration-compliances-for-ngos-as-per-finance-bill-2020\/#Criteria_for_filing_Form_CSR-1\" >Criteria for filing Form CSR-1<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/new-registration-compliances-for-ngos-as-per-finance-bill-2020\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Understanding_the_New_registration_compliances_for_NGOs_as_per_Finance_Bill_2020\"><\/span>Understanding the New registration compliances for NGOs as per Finance\nBill 2020<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Getting the <a href=\"https:\/\/corpbiz.io\/ngo-registration\"><strong>NGO registered<\/strong><\/a> is one thing and managing it successfully is a whole new ball game. As per The Finance Act, 2020, new registration compliances for NGOs are introduced. Also, certain amendments have been which came into force on 1 June 2020. The registration process is now a completely online process. All the NGOs will receive a unique registration number to help build a database of all the NGOs working in India. This move will help the NGOs in bringing some much-needed order to the system. Let us now take a quick look in understanding the Prerequisites NGOs should follow to avoid the trouble in availing the exemption-<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_New_Registration_Compliance_for_NGOs_Under_Section_12AB\"><\/span>1. New Registration Compliance for NGOs Under Section 12AB<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Registering under section 12 AB is one of the prerequisites NGOs should follow to avail of the exemption.&nbsp;<\/p>\n\n\n\n<p>All Non-government\norganizations are now required to register under Section 12AB. Registration\nunder Section 12AB is required to avail of the benefits provided under Sections\n11 and 12, effective from 1 April 2021.<\/p>\n\n\n\n<p>As per Finance Act, 2020,\nextensive alterations are made regarding the provisions related to NGOs\nexempt&nbsp;<strong>u\/s 11 or u\/s 12<\/strong>&nbsp;of the Income Tax Act, 1961. The\nchanges in the Finance Act regard with the&nbsp;<\/p>\n\n\n\n<ol>\n<li><strong>New Registration\ncompliances for NGOs already registered under section 12AB<\/strong>,&nbsp;<\/li>\n\n\n\n<li><strong>Renewal of registration,<\/strong><\/li>\n\n\n\n<li><strong>Approval for deduction\nu\/s 80G and,<\/strong><\/li>\n<\/ol>\n\n\n\n<p>To avail, the existing\nexemption u\/s 10 or 11, all the existing non-Government organizations\nregistered under&nbsp;<strong>Sections 12A, Section 12AA, Section 10(23C), Section\n80G<\/strong>&nbsp;are mandatorily required to get a new registration done under\nsection 12AB.&nbsp;<\/p>\n\n\n\n<p>However, in new registration compliance for NGOs, they will have to apply for registration under section 12AB of the <em><strong>Income Tax Act, 1961<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/The_Income-tax_Act,_1961\"><em><strong>[1]<\/strong><\/em><\/a><\/sup>.<\/p>\n\n\n\n<p><strong>Note-<\/strong><\/p>\n\n\n\n<ol>\n<li><strong>If the NGO is already\nregistered under Section 12A\/12AA, it must get freshly registered under Section\n12AB within three months.<\/strong>&nbsp;<\/li>\n\n\n\n<li><strong>In the case of new\nregistration, provisional registration for three years from the assessment year\nfrom which registration is sought will be given.<\/strong><\/li>\n<\/ol>\n\n\n\n<p>All these changes made by\nthe authority are implied as to the new registration compliances for NGOs. NGOs\nshould follow as they have caused concerns among Non-Government Organizations.\nIt has also resulted in more strict compliance than before.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Re-registering_the_NGOs_Under_Form_10A\"><\/span>2. Re-registering the NGOs Under Form 10A<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>NGOs registered under\nSection 80G and Section 12A\/12AA have the advantage of availing tax exemption.\nNow, As per the Finance Act 2020-Registration compliance for NGOs, all NGOs are\nrequired to re-register themselves with the income tax department through Form\n10A.&nbsp;<\/p>\n\n\n\n<p><strong>CBDT has notified Form\n10A&nbsp;<\/strong>to enable NGOs to move their existing\nregistration to the new registration scheme under section 12AB. Henceforth any\napplication for NGO registration shall be required to be made in form 10A. For\nregistration or provisional registration, Form 10A can be filed\nelectronically.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_New_Registration_compliance_for_NGOs_under_Section_80G\"><\/span>3.&nbsp;New Registration compliance for NGOs under Section 80G<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A donor can claim income\ndeduction under Section 80G of the Act while making donations to certain relief\nfunds and charitable institutions. The deduction is available to the donor only\nwhen the donation is made to non-government organizations approved under\nSection 80G. Further, the Finance Bill 2020 has made changes to this section\nthat are applicable from 1 June 2021:<\/p>\n\n\n\n<ul>\n<li>An obligation to state donations received has been imposed on the charitable organizations, failure of which might result in a penalty. Also, the donor will not be able to claim a tax deduction.<\/li>\n\n\n\n<li>The perpetual registration concept has been withdrawn, and institutions henceforward need to seek renewal&nbsp;<strong>every Five years.<\/strong><\/li>\n\n\n\n<li>A provisional registration&nbsp;<strong>valid for three years<\/strong>&nbsp;can be pleaded by NGOs that haven\u2019t initiated their charitable activities.<\/li>\n\n\n\n<li>The Principal Commissioner or Commissioner has the authority to grant the registration under section 80 G.<\/li>\n<\/ul>\n\n\n\n<p><strong>Note- Form 10A has to be submitted to get approved under Section 80G.<\/strong> Form No. 10A is required to be furnished for registration under section 12AB and approval under section 80G. However, Form 10A is required to be filed twice for both section 12 AB and 80G. In a nutshell, Form 10A is one of the prerequisites NGOs should follow. For the same, separate Form 10A has to be filed for different provisions.<\/p>\n\n\n\n<div class=\"shadow1\">New registration Compliance for NGOs as per Finance Act, 2020.Filing of Form CSR-1 with the Registrar for registering the companies for undertaking CSR Activities-<\/div>\n\n\n\n<p>As per the amendment, Filing CSR-1 is one of the prerequisites NGOs should follow to avail of the exemption. For registering the entities undertaking CSR Activities, Form CSR-1 is to be filed with the Registrar of the Companies.<\/p>\n\n\n\n<div>Form CSR-1 is required to be filed under Section 135 of the Companies Act, 2013 and Rule 4 (1) and (2) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Criteria_for_filing_Form_CSR-1\"><\/span>Criteria for filing Form CSR-1<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">NGO should be one of the following institutions<\/h3>\n\n\n\n<p>A Company registered under Section 8 of the Companies Act, or an established public trust or a registered society shall be registered&nbsp;<strong>u\/s <a href=\"https:\/\/corpbiz.io\/80g-and-12a-registration\" title=\"12a and 80g registration in India\">12A, and 80 G&nbsp;of the Income Tax Act<\/a><\/strong>, 1961, by the&nbsp;<strong>Central and State Government<\/strong>&nbsp;or as per the enactment<strong>&nbsp;of Parliament or a State legislature.<\/strong><\/p>\n\n\n\n<p>If the NGOs mentioned\nabove wish to perform any Corporate Social responsibility activities shall\nregister themselves with the Central government. NGOs can get the registration\ndone by filing form CSR-1 electronically.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">As of the date of applying, NGO should have a valid registration under Section 80G and Section 12AA\/12AB<\/h3>\n\n\n\n<p>Before setting up a new NGO, an applicant needs to register under Section 12AB and Section 80G of the Income-tax Act before getting CSR funding.<\/p>\n\n\n\n<p><strong><em>For filing Form CSR-1, an applicant requires the below-mentioned documents<\/em><\/strong><\/p>\n\n\n\n<ul>\n<li><strong>PAN card of the organization and authorized person.<\/strong><\/li>\n\n\n\n<li><strong>DSC of the authorized person.<\/strong><\/li>\n\n\n\n<li><strong>Mobile Number and Email Id<\/strong><\/li>\n\n\n\n<li><strong>Particulars of governing body members<\/strong><\/li>\n\n\n\n<li><strong>Registration certificate.<\/strong><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Prerequisites NGOs should follow to get the certification of Form CSR<\/h3>\n\n\n\n<ul>\n<li>Based on the certificate by Practicing Professional-He\/she should obtain an engagement letter for the certification of Form CSR-1 from the entity.<\/li>\n\n\n\n<li>Before affixing the DSC certifying the CSR-1 Form, the documents should be verified from the original records prepared by the      Company.<\/li>\n\n\n\n<li>Make sure that the records have been properly prepared and signed by the required officers.<\/li>\n<\/ul>\n\n\n\n<div class=\"shadow1\"><strong>Note:<\/strong> In case of default or wrong certification, the Practicing Professional, shall be liable for action under Section 448 of the Companies Act.<\/div>\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>Competent NGOs input to the process of public policy formulation increases the applicability of legislation and the seriousness of governmental decision-making. According to the government, these changes aim to bring transparency in the working of NGOs, and NGOs need to maintain a high degree of transparency in not just their work but also their financials. Also, to maintain their credibility, NGOs need to keep their income and expenditure open to public scrutiny. These amendments are the new registration compliances for NGOs that they should follow to maintain accountability.<\/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\/registering-an-ngo-in-india\/\">An Outlook: Registering an NGO in India <\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the past time, the government had a more resilient and moderate approach toward NGOs. However, in recent times, the government has reconstructed by opting more stringent system. Through the Finance Bill 2020, necessary changes came into force where re-registration under Section 80G and new registration under Section 12AB are now required. Also, a new [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":38170,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[2033],"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":2859,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/38149"}],"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=38149"}],"version-history":[{"count":26,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/38149\/revisions"}],"predecessor-version":[{"id":66460,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/38149\/revisions\/66460"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/38170"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=38149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=38149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=38149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}