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Society Registration
In India non profit / public charitable organisations can be registered as trusts, societies, or a private limited non profit company, under section-25 companies. Non-profit organisations in India (a) exist independently of the state; (b) are self-governed by a board of trustees or ‘managing committee’/ governing council, comprising individuals who generally serve in a fiduciary capacity; (c) produce benefits for others, generally outside the membership of the organisation; and (d), are ‘non-profit-making’, in as much as they are prohibited from distributing a monetary residual to their own members.
Section 2(15) of the Income Tax Act – which is applicable uniformly throughout the Republic of India – defines ‘charitable purpose’ to include ‘relief of the poor, education, medical relief and the advancement of any other object of general public utility’. A purpose that relates exclusively to religious teaching or worship is not considered as charitable. Thus, in ascertaining whether a purpose is public or private, one has to see if the class to be benefited, or from which the beneficiaries are to be selected, constitute a substantial body of the public. A public charitable purpose has to benefit a sufficiently large section of the public as distinguished from specified individuals. Organisations which lack the public element – such as trusts for the benefit of workmen or employees of a company, however numerous – have not been held to be charitable. As long as the beneficiaries of the organisation comprise an uncertain and fluctuating body of the public answering a particular description, the fact that the beneficiaries may belong to a certain religious faith, or a sect of persons of a certain religious persuasion, would not affect the organisation’s ‘public’ character.
Whether a trust, society or section-25 company, the Income Tax Act gives all categories equal treatment, in terms of exempting their income and granting 80G certificates, whereby donors to non-profit organisations may claim a rebate against donations made. Foreign contributions to non-profits are governed by FC(R)A regulations and the Home Ministry.
CAF would like to clarify that this material provides only broad guidelines and it is recommended that legal and or financial experts be consulted before taking any important legal or financial decision or arriving at any conclusion.
Formation and Registration of a Non -Profit organisations in India
1) Trust
2) Society
3) Section-25 Company
I. Trusts
A public charitable trust is usually floated when there is property involved, especially in terms of land and building.
Legislation: Different states in India have different Trusts Acts in force, which govern the trusts in the state; in the absence of a Trusts Act in any particular state or territory the general principles of the Indian Trusts Act 1882 are applied.
Main Instrument : The main instrument of any public charitable trust is the trust deed, wherein the aims and objects and mode of management (of the trust) should be enshrined. In every trust deed, the minimum and maximum number of trustees has to be specified. The trust deed should clearly spell out the aims and objects of the trust, how the trust should be managed, how other trustees may be appointed or removed, etc. The trust deed should be signed by both the settlor/s and trustee/s in the presence of two witnesses. The trust deed should be executed on non-judicial stamp paper, the value of which would depend on the valuation of the trust property.
Trustees : A trust needs a minimum of two trustees; there is no upper limit to the number of trustees. The Board of Management comprises the trustees.
Application for Registration :
The application for registration should be made to the official having jurisdiction over the region in which the trust is sought to be registered.
After providing details (in the form) regarding designation by which the public trust shall be known, names of trustees, mode of succession, etc., the applicant has to affix a court fee stamp of Rs.2/- to the form and pay a very nominal registration fee which may range from Rs.3/- to Rs.25/-, depending on the value of the trust property.
The application form should be signed by the applicant before the regional officer or superintendent of the regional office of the charity commissioner or a notary. The application form should be submitted, together with a copy of the trust deed.
Two other documents which should be submitted at the time of making an application for registration are affidavit and consent letter.
II. Society
According to section 20 of the Societies Registration Act, 1860, the following societies can be registered under the Act: ‘charitable societies, military orphan funds or societies established at the several presidencies of India, societies established for the promotion of science, literature, or the fine arts, for instruction, the diffusion of useful knowledge, the diffusion of political education, the foundation or maintenance of libraries or reading rooms for general use among the members or open to the public, or public museums and galleries of paintings and other works of art, collection of natural history, mechanical and philosophical inventions, instruments or designs.’
Legislation : Societies are registered under the Societies Registration Act, 1860, which is a federal act. In certain states, which have a charity commissioner, the society must not only be registered under the Societies Registration Act, but also, additionally, under the Bombay Public Trusts Act.
Main Instrument : The main instrument of any society is the memorandum of association and rules and regulations (no stamp paper required), wherein the aims and objects and mode of management (of the society) should be enshrined.
Trustees : A Society needs a minimum of seven managing committee members; there is no upper limit to the number managing committee members. The Board of Management is in the form of a governing body or council or a managing or executive committee
Application for Registration :
Registration can be done either at the state level (i.e., in the office of the Registrar of Societies) or at the district level (in the office of the District Magistrate or the local office of the Registrar of Societies).(2)
The procedure varies from state to state. However generally the application should be submitted together with: (a) memorandum of association and rules and regulations; (b) consent letters of all the members of the managing committee; (c) authority letter duly signed by all the members of the managing committee; (d) an affidavit sworn by the president or secretary of the society on non-judicial stamp paper of Rs.20-/, together with a court fee stamp; and (e) a declaration by the members of the managing committee that the funds of the society will be used only for the purpose of furthering the aims and objects of the society.
All the aforesaid documents which are required for the application for registration should be submitted in duplicate, together with the required registration fee. Unlike the trust deed, the memorandum of association and rules and regulations need not be executed on stamp paper.
III. Section-25 Company
According to section 25(1)(a) and (b) of the Indian Companies Act, 1956, a section-25 company can be established ‘for promoting commerce, art, science, religion, charity or any other useful object’, provided the profits, if any, or other income is applied for promoting only the objects of the company and no dividend is paid to its members.
Legislation : Section-25 companies are registered under section-25 of the Indian Companies Act. 1956.
Main Instrument : For a section-25 company, the main instrument is a Memorandum and articles of association (no stamp paper required)
Trustees :
A section-25 Company needs a minimum of three trustees; there is no upper limit to the number of trustees. The Board of Management is in the form of a Board of directors or managing committee.
Application for Registration :
1. An application has to be made for availability of name to the registrar of companies, which must be made in the prescribed form no. 1A, together with a fee of Rs.500/-. It is advisable to suggest a choice of three other names by which the company will be called, in case the first name which is proposed is not found acceptable by the registrar.
2. Once the availability of name is confirmed, an application should be made in writing to the regional director of the company law board. The application should be accompanied by the following documents: Three printed or typewritten copies of the memorandum and articles of association of the proposed company, duly signed by all the promoters with full name, address and occupation.
A declaration by an advocate or a chartered accountant that the memorandum and articles of association have been drawn up in conformity with the provisions of the Act and that all the requirements of the Act and the rules made thereunder have been duly complied with, in respect of registration or matters incidental or supplementary thereto.
Three copies of a list of the names, addresses and occupations of the promoters (and where a firm is a promoter, of each partner in the firm), as well as of the members of the proposed board of directors, together with the names of companies, associations and other institutions in which such promoters, partners and members of the proposed board of directors are directors or hold responsible positions, if any, with description of the positions so held.
A statement showing in detail the assets (with the estimated values thereof) and the liabilities of the association, as on the date of the application or within seven days of that date. An estimate of the future annual income and expenditure of the proposed company, specifying the sources of the income and the objects of the expenditure.
A statement giving a brief description of the work, if any, already done by the association and of the work proposed to be done by it after registration, in pursuance of section-25.
A statement specifying briefly the grounds on which the application is made.
A declaration by each of the persons making the application that he/she is of sound mind, not an undischarged insolvent, not convicted by a court for any offence and does not stand disqualified under section 203 of the Companies Act 1956, for appointment as a director.
3. The applicants must also furnish to the registrar of companies (of the state in which the registered office of the proposed company is to be, or is situate) a copy of the application and each of the other documents that had been filed before the regional director of the company law board.
4. The applicants should also, within a week from the date of making the application to the regional director of the company law board, publish a notice in the prescribed manner at least once in a newspaper in a principal language of the district in which the registered office of the proposed company is to be situated or is situated and circulating in that district, and at least once in an English newspaper circulating in that district.
5. The regional director may, after considering the objections, if any, received within 30 days from the date of publication of the notice in the newspapers, and after consulting any authority, department or ministry, as he may, in his discretion, decide, determine whether the licence should or should not be granted.
6. The regional director may also direct the company to insert in its memorandum, or in its articles, or in both, such conditions of the licence as may be specified by him in this behalf.
IV. Special Licensing
In addition to registration, a non-profit engaged in certain activities might also require special license/permission. Some of these include (but are not limited to):
A place of work in a restricted area (like a tribal area or a border area requires a special permit – the Inner Line Permit usually issues either by the Ministry of Home Affairs or by the relevant local authority (i.e., district magistrate).
To open an office and employ people, the NGO should be registered under the Shop and Establishment Act.
To employ foreign staff, an Indian non-profit needs to be registered as a trust/society/company, have FCRA registration and also obtain a No Objection Certificate. The intended employee also needs a work visa.
A foreign non-profit setting up an office in India and wanting staff from abroad needs to be registered as a trust/society/company, needs permission from the Reserve Bank of India and also a No Objection Certificate from the Ministry of External Affairs.
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FCRA Registration
Introduction
The Foreign Contribution (Regulation) Act, 2010 (42 of 2010) dated the 26th September, 2010 was notified in the Gazette of India – Extraordinary – Part II – Section I dated the 27th September, 2010. However, the Act has come into force with effect from the 1st May, 2011 vide Gazette Notification vide G.S.R. 349 (E) dated the 29th April, 2011. Consequently, the earlier Act, viz., the Foreign Contribution (Regulation) Act, 1976 has been repealed. The Foreign Contribution (Regulation) Rules, 2011 made under section 48 of FCRA, 2010 have also come into force simultaneously with FCRA, 2010 vide Gazette Notification vide G.S.R. 349 (E) dated the 29th April, 2011. While the provisions of the repealed FCRA, 1976 have generally been retained, the FCRA, 2010 is an improvement over the repealed Act as more stringent provisions have been made in order to prevent misutilisation of the foreign contribution received by the associations. The prime objective of the Act is to regulate the acceptance and utilization of foreign contribution and foreign hospitality by persons and associations working in the important areas of national life. The focus of the Act is to ensure that the foreign contribution and foreign hospitality is not utilized to affect or influence electoral politics, public servants, judges and other people working the important areas of national life like journalists, printers and publishers of newspapers, etc. The Act also seeks to regulate flow of foreign funds to voluntary organizations with the objective of preventing any possible diversion of such funds towards activities detrimental to the national interest and to ensure that individuals and organizations may function in a manner consistent with the values of the sovereign democratic republic.
Organizations seeking foreign contributions for definite cultural, social, economic, educational or religious programmes may either obtain registration or prior permission to receive foreign contribution from Ministry of Home Affairs by making application in the prescribed format and furnishing details of the activities and audited accounts. The registration is granted only to such association which has proven track record of functioning in the chosen field of work during last three years and after registration, such organization is free to receive foreign contribution from any foreign source for its stated objectives. Registration is granted only after thorough security vetting of the activities and antecedents of the organization and office bearers thereof. However, such organizations which are newly established and do not have proven track record of functioning may also receive foreign contribution for specific activities, for a specific purpose and from a specific source after seeking project based prior permission (PP) from the Ministry of Home Affairs.
In order to bring in transparency in the administration of the Foreign Contribution (Regulation) Act, 2010 and the Rules framed thereunder, improve the functioning, disseminate the information and enhance user friendliness of the various procedures, the web-site is uploaded with all the related information for guidance of all concerned.
Foreign Contribution Regulation Act (FCRA) was enacted in the year 1976 with the prime objective of regulating the acceptance and utilization of foreign contribution and foreign hospitality by associations and persons working in the important areas of national life. The focus of this Act is to ensure that the foreign contribution and foreign hospitality is not utilized to affect electoral politics, public servants, judges and other people working the important areas of national life like journalists, printers and publishers of newspapers, etc.
The organizations seeking foreign contributions for definite cultural, social, economic, educational or religious programmes may either obtain registration to receive foreign contribution from Ministry of Home Affairs by making application in the prescribed format and furnishing details of the activities and audited accounts. The FCRA registration is granted only to such association, which has proven track record of functioning in the chosen field of work during last three years, and after registration, such organization is free to receive foreign contribution from any foreign source for stated objectives. The FCRA registration is granted thorough security vetting of the activities and antecedents of the organization and office bearers thereof. On the other hand, such organizations which are newly established and do not have proven track record of functioning may also receive foreign contribution for specific activities, for a specific purpose from a specific source after seeking project based previous permission (PP) from the Ministry of Home Affairs.
FCRA Registration Procedure
Application for registration under FCRA can be filed any time after registration of the organization, but the organization with a considerable past history of activities have a greater chance of convincing the FCRA authorities with regard to genuineness and the relevance of their purpose. Organizations desirous of registering themselves with the FCRA department are required to apply in form FC 8 along with various documents. The FCRA department may ask the intelligence bureau for a report on which FCRA department decides whether to accept or reject the application. The FCRA department issues a registration certificate and provides a permanent registration number, which is required to be quoted in all future correspondence and filing of returns and forms. Under certain circumstances application for registration will be refused if it affects the sovereignty and integrity of India.
FREQUENTLY ASKED QUESTIONS (FAQs) ON FCRA
Q. 1 What is foreign contribution?
Ans. As defined in Section 2(1)(h) of FCRA, 2010, “foreign contribution” means the donation, delivery or transfer made by any foreign source, ─
Of any article, not being an article given to a person* as a gift for his personal use, if the market value, in India, of such article, on the date of such gift is not more than such sum as may be specified from time to time by the Central Government by rules made by it in this behalf;
Of any currency, whether Indian or foreign;
Of any security as defined in clause (h) of section 2 of the securities Contracts(Regulation) Act, 1956 and includes any foreign security as defined in clause (o) of Section 2 of the Foreign Exchange Management Act, 1999.
Explanation 1 – A donation, delivery or transfer or any article, currency or foreign security referred to in this clause by any person who has received it form any foreign source, either directly or through one or more persons, shall also be deemed to be foreign contribution with the meaning of this clause.
Explanation 2 – The interest accrued on the foreign contribution deposed in any bank referred to in sub-section (1) of Section 17 or any other income derived from the foreign contribution or interest thereon shall also be deemed to be foreign contribution within the meaning of this clause.
Explanation 3 – Any amount received, by an person from any foreign source in India, by way of fee (including fees charged by an educational institution in India from foreign student) or towards cost in lieu of goods or services rendered by such person in the ordinary course of his business, trade or commerce whether within India or outside India or any contribution received from an agent or a foreign source towards such fee or cost shall be excluded from the definition of foreign contribution within the meaning of this clause.
In terms of FCRA, 2010 “person” includes
(i) an individual;
(ii) a Hindu undivided family;
(iii) an association; and
(iv) a company registered under section 25 of the Companies Act, 1956.
The sum, as stated at (i) above, has not been specified in FCRR, 2011.
Q. 2 Whether earnings from foreign client(s) by a person in lieu of goods sold or services rendered by it is treated as foreign contribution?
Ans. No. As clarified at Explanation 3 above, foreign contribution excludes earnings from foreign client(s) by a person in lieu of goods sold or services rendered by it as this is a transaction of commercial nature.
Q. 3 Section 2(c)(i) of repealed FCRA, 1976 inter alia defined foreign contribution as the donation, delivery or transfer made by any foreign source of any article, not given to a person as a gift for personal use, if the market value, in India, of such article exceeds one thousand rupees. What limit has been prescribed in FCRA, 2010 in respect of such article?
Ans. The limit has not been specified in FCRR, 2011. Till any limit is fixed in the Rules, foreign contribution has to be understood without any limit.
Q. 4 What is a foreign source?
Ans. Foreign source, as defined in Section 2(1) (j) of FCRA, 2010 includes:-
The Government of any foreign country or territory and any agency of such Government;
Any international agency, not being the United Nations or any of its specialized gencies, the World Bank, International Monetary Fund or such other agency as the Central Government may, by notification, specify in this behalf;
A foreign company;
A corporation, not being a foreign company, incorporated in a foreign country or territory;
A multi-national corporation referred to in sub-clause (iv) of clause (g);
A company within the meaning of the Companies Act, 1956, and more than one-half of the nominal value of its share capital is held, either singly or in the aggregate, by one or more of the following, namely:-
(A) The Government of a foreign country or territory;
(B) The citizens of a foreign country or territory;
(C) Corporations incorporated in a foreign country or territory;
(D) Trusts, societies or other associations of individuals (whether incorporated or not), formed or registered in a foreign country or territory;
(E) Foreign company;
A trade union in any foreign country or territory, whether or not registered in such foreign country or territory;
A foreign trust or a foreign foundation, by whatever name called, or such trust or foundation mainly financed by a foreign country or territory;
A society, club or other association or individuals formed or registered outside India;
A citizen of a foreign country;” List of agencies of the United Nations, World Bank and some other International agencies/multilateral organisations, which are exempted from the definition of ‘foreign source’,
Q. 5 Who can receive foreign contribution?
Ans. A ‘person’, as defined in Section 2(1)(m) with the exclusion of those mentioned in Section 3 of FCRA, 2010, having a definite cultural, economic, educational, religious or social programme can receive foreign contribution after it obtains the prior permission of the Central Government, or gets itself registered with the Central Government. Illustrative but not exhaustive lists of activities which are permissible and may be carried out by associations of different nature are available on the website.
Q. 6 Who cannot receive foreign contribution?
Ans. As defined in Section 3(1) of FCRA, 2010, foreign contribution cannot be accepted by any :
A candidate for election;
Correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper;
Judge, government servant or employee of any Corporation or any other body ontrolled on owned by the Government;
Member of any legislature;
Political party or office bearer thereof;
Organization of a political nature as may be specified under subsection
Of Section 5 by the Central Government.
Association or company engaged in the production or broadcast of audio news or audio visuals or current affairs programmes through any electronic mode, or any other electronic form as defined in clause (r) of sub-section (i) of Section 2 of the Information Technology Act, 2000 or any other mode of mass communication;
Correspondent or columnist, cartoonist, editor, owner of the association or company referred to in clause (g).
Explanation – In clause (c) and section 6, the expression “corporation’ means a corporation owned or controlled by the Government and includes a Government company as defined in section 617 of the Companies Act, 1956.
Individuals or associations who have been prohibited from receiving foreign contribution.
Q. 7 Are there any banned organisations from whom foreign contribution should not be accepted?
Ans. Yes. FCRA is meant for regulating the receipt and utilisation of funds by any person for legitimate purposes.
Q. 8 Whether donation given by Non-Resident Indians (NRIs) is treated as ‘foreign contribution’?
Ans. Contributions made by a citizen of India living in another country (i.e., Non-Resident Indian), from his personal savings, through the normal banking channels, is not treated as foreign contribution. However, while accepting any donations from such NRI, it is advisable to obtain his passport details to ascertain that he/she is an Indian passport holder.
Q. 9 Whether foreign remittances received from a relative are to be treated as foreign contribution as per FCRA, 2010?
Ans. The position in this regard as given in Section 4(e) of FCRA, 2010 and Rule 6 of FCRR, 2011 are as under: Subject to the provisions of section 10 of the FCRA, 2010, nothing contained in section 3 of the Act shall apply to the acceptance, by any person specified in that section, of any foreign contribution where such contribution is accepted by him from his relative. However, in terms of Rule 6 of FCRR, 2011, any person receiving foreign contribution in excess of one lakh rupees or equivalent thereto in a financial year from any of his relatives shall inform the Central Government in Form FC-1 within thirty days from the date of receipt of such contribution.
Q.10 Can the fee paid by the foreign delegates/participants attending/participating in a conference/seminar etc. be termed as foreign contribution and thus require permission from FCRA?
Ans. “Delegate/participation Fees” paid in foreign currency by foreign delegates/participants for participation in a conference/seminar and which is utilized for the purpose of meeting the expenditure of hosting the conference/seminar is not treated as foreign contribution and as such no permission under FCRA is required.
Q. 11 Whether a Company incorporated in India under the Companies Act, 1956 having its operations in 2 or more countries is to be treated as a MNC/foreign source under FCRA, 2010?
Ans. No. However, as defined under section 2(j)(vi) as a company within the meaning of the Companies Act, 1956 having more than one-half of the nominal value of its share capital held, either singly or in the aggregate, by one or more of the following will be treated as a “foreign source”:
(A) The Government of a foreign country or territory;
(B) The citizens of a foreign country or territory;
(C) Corporations incorporated in a foreign country or Territory;
(D) Trusts, societies or other associations of individuals Whether incorporated or not), formed or registered in a foreign Country or territory”
Q. 12 Can foreign contribution be received in rupees?
Ans. Yes. Any amount received from ‘foreign source’ in rupees or foreign currency is construed as ‘foreign contribution’ under law. Such transactions even in rupees term are considered foreign contribution.
Q. 13 Will interest earned from foreign contribution be considered foreign contribution?
Ans. Yes.
35 A C Registration
INCOME TAX – PRIVILEGES TO THE DONORS U/S 35AC
INTRODUCTION
As we already know that an NGO can avail income tax exemption by getting itself registered and complying with certain other formalities, but such registration doesn’t provide any benefit to the persons making donations. The Income Tax Act has certain provisions which offer tax benefits to the “donors”. All NGOs should avail the advantage of these provisions to attract potential donors. Section 35AC is one of such sections.
REGISTRATION UNDER SECTION 35Ac
The Central Government approves certain NGOs and notifies them as eligible for project or schemes for the purposes of section 35AC. If an NGO succeeds in getting such an approval for its projects then it stands a very good chance of mobilising funds from the corporate and the business sector. Business houses making contribution to such approved projects are allowed the benefits of deducting such contribution as expenditure.
NATIONAL COMMITTEE
The Central Government has constituted a National Committee to identify projects and schemes to be notified under section 35AC, such committee normally consists of eminent persons. All NGOs are entitled to apply to the National Committee to get its projects or schemes approved.
WHERE THE APPLICATION IS TO BE MADE
The application for approval by the National Committee should be made to the Secretary, National Committee for Promotion of Social & Economic Welfare, Dept. of Revenue, Govt. of India, North Block, New Delhi – 110001.
THE APPLICATION AND ITS ENCLOSURE
The application is to be made in 2 Sets, written either in Hindi or English.
Details such as name, address and status of applicant, the district/ ward circle where assessed/PAN number.
Audited Balance Sheet, Profit& Loss Account or Income& Expenditure Account for the latest year and two preceding years.
How is it constituted i.e. whether as a trust, society, etc supported by relevant documents like trust deed, rules & regulation, memorandum of association etc. and registration certificate, if any.
Name & Addresses of the persons managing the affairs of the association or institution, including those who left the organisation but were managing the affairs of the association or institution during the 3 years preceding the date of application.
If the association or institution is notified under section 10(23)(C) or is approved for the purposes of section 80G, the particulars of such approval granted.
Brief particulars of the activities of the association or institution during 3 years preceding the date of application or since inception if the association or institution is less than 3 years old.
Such other information as the association or institution may like to place before the National Committee.
ADDITIONAL INFORMATION REGARDING THE PROJECT/SCHEME TO BE SUBMITTED
Title of project or scheme;
Date of commencement;
Duration and the likely date of completion;
Estimated cost of the project;
Category or class of persons who are likely to be benefited from the project or scheme;
Affirmation that no benefit from the project or scheme other than remuneration or honorarium, will accrue to persons managing the affairs of the NGO ;
Such other particulars as the applicant may place before the National Committee.
CERTIFICATE TO BE ISSUED TO THE DONOR
All approved NGOs are required to issue a certificate to the donor for all contributions & receipts under section 35AC. The certificate is to be issued in Form 58A.
This certificate will enable the donor to claim exemption from its taxable income. Further, the NGOs should also send an Annual Report to the National Committee indicating the progress of the work relating to the project/scheme and the following informations in respect of each contributor :
Name of the contributors & their addresses.
PAN.
Amount of contributions.
The project/scheme for which the contribution is made.
Total amount of contribution received during the year.
Total cost of the project approved by the National Committee.
Such Annual Report should reach the National Committee by 30th June, following the financial year in which the amount is received.
DEDUCTION OF CONTRIBUTION UNDER SECTION 80GGA
Section 35AC is available to assessees who have income from the head ‘business’ or ‘profession’. Therefore, for the assessees who do do not have income from business or profession, section 80GGA provides for deduction on donations made to eligible projects under section 35AC. Section 80GGA, is a broader section and deductions are also available for contributions made for scientific research under section 35CCA & 35CCB, which have been withdrawn. 100 per cent deduction is available under section 80GGA, subject to the available gross total income under section 80A. Therefore, unlike section 35AC, deduction under section 80GGA cannot be carried forward in the form of losses to next year .
OVERALL SUMMARY
To sum up the discussions :
Under section 35AC, organisations having income from business or profession can get 100 per cent deduction. Charitable Organisations can get registered themselves u/s. 5AC by applying to the National Committee under rule 11F to 11-O, if they are carrying on any business.
The Central Goverment has specified various types of projects of national needs for which Charitable Organisations can make donations.
Business houses making donations for the purpose of section 35AC, should be careful that the donee organisation continues to enjoy approval u/s. 35AC. As the approval under section 35(AC) is not permanent in nature.
To get approval u/s. 35AC two sets of application have to be made alongwith specified enclosures to secretary of National Committee, New Delhi.
The National Committee may recommend or reject the project but when the approval is recommended then it is for a period of maximum 3 years and it could be further extended if the National Committee is satisfied with the performance during the period.
A certificate has to be issued to the donor in Form 58A. This certificate will enable the donor to claim exemptions.
The National Committee may withdraw the approval if the project is not carried out in accordance with the approved conditions. To withdraw a project National Committee should provide an opportunity of being heard to the aggrieved organisation.
Section 35AC provides deduction from income from business and profession. Similar deduction is also available u/s. 80GGA, for assessees having income from other heads
Pulse Associates is also involved in doing Startup Registration