Navigating Legal Compliance

Compliance Obligations for NGOs in India:

• Registration: Non-governmental organizations (NGOs) can choose to register under various legal forms, including Society, Trust, Section 8 Company, or a Cooperative Society. The registration process varies for each legal form.
• Income Tax Exemptions: Securing tax-exempt status is crucial for NGOs. Registration under Sections 12A and 80G of the Income Tax Act allows NGOs to seek income tax exemptions.
• Foreign Contribution Regulation Act (FCRA): NGOs receiving foreign contributions must register under Section 6(1) of the FCRA, 2010. The FCRA registration application can be submitted online at FCRA Online Portal. For detailed information on FCRA registration, visit India Filings.
• PAN and TAN: NGOs are obligated to obtain a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN). NGOs can apply for PAN by submitting Form 49A (Application for Allotment of Permanent Account Number) to the Income Tax Department. The form is available online on the official NSDL website at www.onlineservices.nsdl.com

NGOs need TAN to comply with TDS regulations when making payments subject to TDS, such as salaries and contractor payments. NGOs can apply for TAN by submitting Form 49B (Application for Allotment of TAN) online through the NSDL-TIN website.

• Goods and Services Tax (GST): NGOs engaged in the supply of goods or services, where the annual turnover exceeds the prescribed threshold of 20 lakhs, are required to register for GST.

NGOs are obligated to register for GST within 30 days from the date on which they become liable to register, i.e., when their annual turnover exceeds the prescribed limit. NGOs can apply for GST registration online through the GST Common Portal (https://www.gst.gov.in/).

The application involves providing information about the organization, its directors/trustees, and the nature of business activities.

• Annual Compliance: NGOs are often required to submit annual returns and audited financial statements to the relevant authorities.
• Board Meetings and Governance: NGOs must adhere to governance norms, including conducting regular board meetings, maintaining accurate records, and ensuring transparency.
• Documentation and Record Keeping: Proper documentation of all financial transactions and meticulous record-keeping are essential for compliance.
• Employee Provident Fund (EPF) and Employee State Insurance (ESI): NGOs with employees are obligated to comply with EPF and ESI regulations.
• Registration under other Acts: Depending on the nature of their activities, NGOs may need to register under specific acts related to their work, such as the Juvenile Justice Act if working with children.

Staying abreast of these compliance facets ensures that NGOs operate within the legal framework, fostering transparency and accountability in their endeavors.