What is NGO / Non Profit Organization?

An NPO/ NGO can be formed for the promotion of any useful object like sports, education, research activities etc. The term No Profit does not mean that the Company cannot generate profit or income, but it essentially means applying the income for further promotion of the object and not for distributing it to the promoters.

In India, NGO is a term for all non-profit organizations including Trust, Society and Section 8 Company.

• Trust: In Charitable Trust at least two people are required, there is no limit of maximum members
• Society: In society, the minimum seven members are required to be the members
• Section 8 Company: A non-profit Company can be registered under section 8 of the Companies Act with the Registrar of Companies.

Benefits of registering an NGO:.

• Improves the credibility of the sector because NGOs can account to a public office.
• Brings organizations into a formal system.
• Helps the sector to get organized.
• Helps in finding ways of getting benefits like tax exemptions and funding opportunities.
• Donations made by individuals to the nonprofit corporation may be tax-deductible.

What is the Need for NGO Registration in India?

Running an NGO after getting it registered is a smart decision. NGO registration is required for the following reasons

• 1. Establish Credibility for fundraising, donations, collaborations and support.
• 2. Facilitate visibility, which in turn paves for its growth through community impact.
• 3. Attract volunteers to fund its operations by offering income tax exemptions to donors.
• 4. Avail Tax Benefits under the Income Tax Act of 2013, leading to financial sustainability.
• 5. Reduce Tax Obligations under the ITR Act of 2013 via stamp duty exemption

Laws Applicable to NGOs in India

• 1. Trusts - Indian Trusts Act, 1982
• 2. Society – Societies Registration Act, 1860
• 3. Section 8 Company – Section 8 Companies Act, 2013