organisations remains detached from the Government. It may be noted that the purpose and intent of these organisations is not to work with any profit motive. However, they may have some profit making activity provided any income or surplus is applied for charitable or religious purpose. The term NGO by its name refers to the organisation that seeks charitable funds and utilise the same towards the well being and advancement of the society. An NGO can either be registered as   Trust Section 3 in The Indian Trusts Act, 1882 Trust is a type of organisation which is formed as per the Indian Trust Act, 1982(herein after referred as the Act). As per the Act “trust” is an obligation annexed to the ownership of property, and arising reposed in and accepted by the owner, out of a confidence or declared and accepted by him, for the benefit of another, or of another and the owner. Documents Required for Trust Registration in India   Step-by-Step Procedure for Registering a Trust in India Step 1. Select an appropriate Name for the Trust: The first step in the formation of trust is the name selection for the proposed trust. Step 2. Determine the number of the trustees: While formation of the Trust determination of the trustees is must. There should be at least two trustees to commence the trust. Step 3. Drafting of Trust Deed Contents of a Trust Deed:   Step 4. Register with sub-registrar: For registration of the trust deed, trustees and author of the trust must be present before the sub registrar office along with 2 witnesses. Properly attested copy of trust deed along with the registration fees required at the time of registration. Step 5.Application for PAN and TAN: While Trust registration, apply for PAN and TAN of the trust thereafter apply for bank account. Registration under section 12AB (earlier 12AA of the Income Tax Act, 1961)   Step-1: Log in to Income Tax India E-Filing Portal using login ID and password Step-2: Navigate to “Income Tax Forms” under E-File tab and select Form 10A/ 10AB, as the case may be Step-3: Select the option “Prepare and submit online” to fill requisite details in the form Step-4: Attach the required document along with Form 10A/10AB Step-5: Submit the form using digital signatures or EVC Step-6: On receipt of application in Form No. 10A or 10AB, as the case may be, the PCIT or CIT shall process the application within the prescribed time limit. In case the applicant is already registered u/s 12AA or in case of provisional registration, where Form No. 10A has been submitted by the applicant. Order granting registration shall be granted in writing in Form No. 10AC. A 16-digit Unique Registration Number (URN) shall be allotted after successful registration. In cases where Form No. 10AB has been filed, order granting registration or rejection or cancellation shall be in Form No. 10AD Time Limit for Registration under various circumstances:
Sub-clause of clause (ac) of section 12A(1) Category of Entity Time limit for filing application for registration Applicable Form Time limit for passing order
1. Trusts or institutions which are registered under section 12AB and the period of the said registration is due to expire Atleast 6 months before the expiry of the said period Form 10AB Within 6 months from the end of the month in which the application was received
2. Newly formed trusts or institutions which have been granted provisional registration under section 12AB (Trusts opting for provisional to final registration for 5 years) Atleast 6 months before the expiry of the provisional registration or within 6 months of commencement of its activities, whichever is earlier Form 10AB Within 6 months from the end of the month in which the application was received
3. Trusts or institutions whose registration has become inoperative due to first proviso to section 11(7) of the Act. Registration u/s 12A or 12AA shall become inoperative from the date on which the trust is granted registration u/s 10(23C) Atleast 6months before the commencement of the assessment year from which the said registration is sought to be made operative Form 10AB Within 6 months from the end of the month in which the application was received
4. Trusts or institutions which has adopted or undertaken modifications of the objects which do not adhere the conditions of registration Within a period of 30 days from the date of adoption or modification Form 10AB Within 6 months from the end of the month in which the application was received
Validity period of registration under section 12AB: The validity for registration u/s 12 AB is 5 years. However a provisional registration shall be granted for 3 years. Compliance Requirement under Income Tax:   SOCIETY What is Society A society is formed when group of person come together with a common purpose. A society is registered under Societies Act, 1860. Requirement of minimum members Minimum 7 members are required to form a Society All the compliances of a trust as per the provision of the Income tax Act are same and applicable to a Society except the following: Registration process of Society   Section 8 Company Introduction Section 8 Company referred to as a company which is registered as a Non-Profit Organisation (NPO) which has motive of promoting education, charity, sports, research, social welfare, religion and using the profit incurred for promoting these objectives. Incorporation of a Section 8 Company Companies Act deals with the incorporation of Section 8 Company. An application in Form No. INC-12 has to be submitted along with the below mentioned documents to the Registrar of Companies:   Section 8 Company can also be incorporated using the form Spice +, in part A of form- reserve the name followed by part B. License No. shall be provided to section 8 company during the incorporation. Tax Compliance for Section 8 Companies Section 8 Company shall pay Corporate Tax as per Income Tax Act. Further, Section 8 Company can avail exemption from certain income if it fulfils the following compliances:   Following are the list of mandatory compliances for Section 8 Company "/> Societies and Trust (NGO) – G. K. Kedia
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Societies and Trust (NGO)

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July 15th, 2022

Registration and Compliance Requirement of NGO’S

What is Ngo NGO (Non-Government Organisation) refers to the body which is engaged in the social cause and welfare of the society. These organisations remains detached from…

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November 23rd, 2021

Union Budget 2020 | Charitable Trust Amendments Explained

What is Charitable Trust Charitable institution is a non-profit organization whose primary objective is to philanthropy and social well being such as education, religious or other activities…

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June 20th, 2020

Trust vs. Society vs. AOP | Tax Benefits Comparison

Charitable or religious trust Income tax on various types of income of charitable trust Category of income Income subject to tax Taxability Donations/voluntary contributions Voluntary contributions with…

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