Non-Governmental Organization (NGO) of India

Mantosh Giri

1. What is NGO?

The meaning of NGO is “non-governmental organization”, it is a non-profit group and it functions independently.

3. What are the purposes of an NGO?

The purpose of NGO, to do social works voluntarily for the society or community in their various issues like legal, environmental, cultural, social, science, art, etc. It can be operated by any citizen of India with registration under state and central government. Without registration also we can do social work, but registration gives us a legal right to contribute to nation-building. All NGO registered for charitable purposes. Whatever profit NGO earned, it should be utilized for social work. The main motive of NGO is social work, not profit.  

3. What are the types of NGO registration?

There are three types of NGO registration:  Trust, Society & Section 8 company. (Three are called NGO) for NGO motive it important not types. 

4. Trust Registration?

Trust can be registered as a private trust or public trust. It is applicable to healthcare, education, or other charitable work. It can be registered under state Trust Acts or Central government Trust Acts 1882. Minimum of two people required for trust. One will be the
Author/Founder and another one will be trustees for management. Metting is possible with two trustees, so the founder can be both another trusty. A Trust name can not be reserved, anybody can open trust in the same name. Apart from Maharastra and Gujrat (Charitable Commission), there are not having any provisions for trust registration, but trust deed can be registered in any sub-register office. Act 1882 only applies to your private trust. In a trust deed, you can write anything. Whole power can be given one or two-person in a trust. The FCRA, 12A, 80G, or any government project can be applicable to trust. 

5. Society Registration

Society can be registered under Act, 1860. It is applicable to arts, science, literature, or any other non-profitable objective. It functions fully democratic way. Minimum seven members required for the Society registration prosses. Society can be registered is a state government matter. The name of the Society is reserved, but in other states, the same name can be used. The majority is the main decisionmaker. The FCRA, 12A, 80G, or any government project can be applicable to Society. 

6. Section 8 Company Registration

Section 8 can be registered under the Companies Act, 2013. Minimum two directors are required for the registration section 8 company. It's worked for a charitable purpose. Whatever they earned profits they have to reinvest it in the same organization for performing further functions. The name of the section 8 company is reserved. It is under the central government. Maximum Capital or shareholder only can make decisions. The FCRA, 12A, 80G, or any government project can be applicable to Section 8 companies. 

7. What is 80G Registration?

80G Certificate is issued under Income Tax Act 1961 by Income Tax Department. The benefit of 80G registration: That organization that donates to under section 80G, they get a deduction of 50% of their tax. It attracts donors and the best way to receive funds from a donor. For 80G registration, a NGO must have 12A registration before or an NGO can apply for both 80G and 12A registration. 80G act follows 12A registration. It can apply through online in form number 10G of the income tax act. Along with this form, NGO need to attach an NGO registration certificate or deed, balance sheet, account book, last three years audit report, governing board member details, Income tax return (ITR), NGO office registration bill, and fresh NOC. After that, the NGO will get a notice from the income tax department. They might ask some other information from to NGO during the personal appearance, it’s depending upon them. If they satisfied, on your NGO (your NGO working with a particular vision, and mentioning all the record), then they may grant for your 80G registration. If they are not satisfied, then your application will be rejected, but your NGO can also refilling it again. For religious work purposes, 80G is not applicable.

80G Changes: According to budget 2020

According to budget 2020, 80G must be re-registration by 30^th August 2020. This registration, valid up to 5 years. If your NGO is new, you can also register it for 3 years, with provisional registration. After 3years, you can apply again for regular 80G registration for 5 years. 80G registered organizations must have to issue a certificate of donation to the donor, and the statement must be uploaded to the income tax portal, the donations details will claim into the ITR. If any NGO not filing donation statement details on time or not providing the certificate to the donor, then NGO may be charged 200 rupees per day (let fee penalty, under section 234G, income tax act1961) or under section 271K, you may have to pay the penalty of 10,000 to 1,00,000 rupees. 

FCRA Amendment Act  2020

1. No Subletting

You can not transfer your FCRA fund one organization to another organization. Joint NGO might face more problems now.

2. Limit on Administration Expenditure

Before it was 50%, now it is 20%. You can use your foreign fund for your personal office expenses.

3. Suspension incase of Contravention

If the ministry of home affairs will dought of any wrongdoing in your NGO, MHA (Ministry of Home Affairs)  can suspend your registration till you your NGO proved as right. Until it is proved, you are guilty. 

4. Adhar Quoting

For FCRA registration, permission, or renewal Adhar needed of your directories members. For foreigner passport and OCI (Overseas Citizenship of India) cards need to be submitted. A wrong Aadhaar card will not be accepted. 

5. Duration of Suspension

For pending inquiry, 180days suspension is extended to more 180 days. (Total 360 days).

6. Voluntary Surrender of FCRA Certificate. 

An organization can surrender FCRA certificate, but before it, MHA will check your record details carefully. If you used FCRA fund for anything, it will total occupancy by the MHA committee. 

7. FCRA Bank Account

For FCRA account NGO needs to open a bank account under the MHA approve SBI branch in Delhi.

8. IB (Intelligence Bureau)  Inquiry is Compulsory before  FCRA Renewal.

IB will inquiry before your FCRA renewal. 

Yours Queries

1. Which one will be most fitted for my group called Elshaddai Ministry out of the three NGOs group you have sent? Kindly suggest according to me Trust, I am looking to, but you are an expert to suggest for our ministry of the Lord.

Thank you for your question. For a NGO purpose is more important. The purpose is to do social work. Society's function is dependents on the majority of members. If you are interested in the Trust, it will good, go ahead with that. Please note: If you want to keep power within one or two-person then Trust will good, If all members want equal power than Society will better.

2. If we register Trust do we need to have 12A etc?

If your NGO wants, 33% tax benefits, then surely you need 12A registration. 

3. Our ministry have not yet registered now, but there are about 20 members, do I need members to form Trust?

For Trust two members is enough, if you wanted to keep them as a member, and do not want to give them any power, then you need to mention it in your deed. 

4. I will be founder, and will my wife do for trusted person or secretary and the rest only members?

Yes, it can possible.

5. Which NGO will be more Ministries Assam appropriate to raise funds from well-wishers and friends?

There is three-way to raise funds for your NGO: Private, Government and FCRA. Again 80G has attracted donors, to get 50% revert of their income tax, but it not applicable to religious or private Trust. Apart from that, through the event and website, you can raise funds for your NGO.  

6. I would like to focus our NGO on alcohol abuse and such as marriage counseling and charity donation to very poor people etc.

Yes, you can do that, but it should be mention on your Trust deed before registration. 

7. Financial involvement to register.

Only stamp duty charges. In addition (writer, advocate charges)

8. Financial strategies for ministry through NGOs.

There is three-way to raise funds for your NGO: Private, Government and FCRA. Again 80G has attracted donors, to get 50% revert of their income tax, but it not applicable to religious or private Trust. Apart from that, through the event and website, you can raise funds for your NGO.  

9. I have registered trust, but not working, shall I register for a FCRA.

Without, 3 years of proper audit report, it is not possible to apply for FCRA.