I have been receiving a lot of questions related with the registration and functioning of the NGOs in India. I have written several articles on these topics and these have been very popular among. In today's article, I will address a few frequently asked questions about NGO registration and functioning.
Before I begin, I think it is important for me to tell you about myself. Well, I am neither a lawyer nor am I a Chartered Accountant. I also have not studied any course that is even remotely connected with NGOs. I am web developer, technology blogger and a literature enthusiast. I do a lot of voluntary social work (mostly in the field of literature) and I also have registered a trust. This is the reason I know a few practical things about NGOs.
Now let's begin with frequently asked questions.
Should I register a trust or a society?
Both trust and society can do social work as NGOs. The social work you do does not really get affected by whether you register the NGO as a society or as a trust. The main difference between trust and society lies in the controlling body of these two types of organizations. Learn the difference.
Where should I go to register my NGO?
Trusts are usually registered at the office of sub-registrar of your area. This is the office where sale/purchase of land property are registered. Societies are registered at the office of the Registrar of Societies of your area. If you don't have any clue about where to go for registration, I would suggest that you go to the office of sub-registrar / tehsildar etc. and inquire about where to register your NGO.
Do I need to own office property to start an NGO?
No, you can start an NGO in a rented property as well. You will need a No Objection Certificate (NOC) from the owner of the rented property.
Can a government employee become a trustee?
Yes, a government employee can become a trustee in an Indian trust. See the details here.
Can an NRI become a trustee in an Indian trust?
There is no explicit restriction on an NRI becoming a trustee in an Indian trust. See the details here.
Can a Trustee take salary from trust fund?
You can not take compensation just for being a trustee in a public charitable trust. However, if you're doing some professional work for the trust, you can take a reasonable compensation from the trust fund. Please note the word reasonable. It means that if you draw more compensation than market rate, that would be illegal and immoral. See more details.
How much money is required to start an NGO?
Well, in the registration process, you would need require 2 to 3 three thousand rupees. The amount varies depending on whether you use the services of a professional or you do all the work on your own.
If you take help from a lawyer/CA for preparing documents like trust deed, rules and regulations, memorandum of association etc. —you will have to pay them separately.
How to draft a trust deed?
Trust deed is a legal document written in legal lingo and style. It is better that you find a good lawyer and tell him all the objectives of your social work. A lawyer will help you in drafting your trust deed. You must read and understand the trust deed thoroughly before getting it registered.
Can a CA help in drafting a trust deed?
I would suggest that you take services of a good lawyer instead of a Chartered Accountant. This is because trust deed is a legal document and, therefore, a lawyer is far better suited for preparing it.
Do I need to get my accounts audited every year?
Yes, if you have received 80G and/or 12A exemption certificates from the Income Tax Department, you have to get your accounts audited by a qualified CA every year. You also need to file Income Tax Return (ITR) every year.
How to get government funding for my NGO?
You should contact the appropriate ministry / department in the state or central government. There is no general procedure for getting funds from the government. It may vary from department to department. You need to first do some good social work. Then you should go to the appropriate government agency and tell them about your work and request for funding to continue doing your social work.
What is 80G exemption certificate?
80G is a certificate that you get from the Income Tax department. If an NGO has 80G certificate, then the donors of that NGO will get some tax benefit on the donation amount. Some NGOs are allowed to give 100% tax benefit but most of them are eligible for tax benefit on 50% of donation amount.
How to get 80G exemption for my NGO?
I have written a separate article to answer this.
What is 12A exemption certificate?
If you have 12A exemption certificate from the Income Tax Department, then all the donations you collect for your NGO will remain tax-free. If you do not have this certificate, then you will have to pay income tax on all the donations you are getting. So, it is very important to get 12A certificate.
How to get 12A exemption certificate?
When you apply for 80G certificate, you can also apply for 12A at the same time. So, when you apply for 80G, you should fill two forms: one for 80G (the form is called 10g) and the other for 12A (form is called 10a).
What is the validity of 80G certificate?
If you provide all the documents and the Income Tax department is satisfied, they will give you an 80G certificate with lifetime validity. Earlier the 80G certificate needed to be renewed every three years.
When can I apply for 80G certificate?
You can apply for 80G certificate right after registration of your trust/society. You don't need to wait.
Where to go for applying for 80G certificate?
For applying for 80G certificate, you should go to the Income Tax office under whose jurisdiction your registered address comes.
Should I open a bank account for my NGO?
Yes, you must open a separate bank account for your NGO. The bank account should be in the name of your NGO and you should receive all the funds/donations in this bank account. You must not receive donations in your personal bank account because in such a case the donation will be considered as your personal income. And you will have to pay income tax on that.
Can I use words like “National” in NGO name?
You should avoid use of such words. The registrar will also object on the use of such word because the use of “National” may give impression to people that your organization is related with the government.
Is and Office or Landline Must for Registering the NGO?
You must provide a valid address to be registered as the office of your NGO. This address may be a residential address (your own home) or may be a rented house or a rented/own office space. In case of rented property, you would need an NOC certificate from the owner of the property. Having a landline is not must, but it is useful as it gives your NGO a means of communication.
Have more questions?
If you have more questions, you can post them in the comments section:
- You question must be in clear English because TechWelkin is an English language website.
- Be very specific in your question. I will not be able to answer vague questions.
- As I have said, I am not a lawyer or CA… so, I will not be able to answer that are very technical in this regard.
These were some of the frequently asked question about NGO registration and functioning. If you have anymore questions, please post them in the comments section. I will try and answer you. Thank you for using TechWelkin.