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BENEFITS OF NGO IN INDIA

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  2. BENEFITS OF NGO IN INDIA

STARTUP INDIA RECOGNITION

The benefits include:

  • Trusts get the land from the government;
  • Trust registered under the Trust Act can use government registered name;
  • Tax benefits;
  • 80G certificate benefit under the Income Tax Act 1961;
  • While capital for building construction;
  • Benefits on service and entertainment tax.

WHAT IS NGO REGISTRATION IN INDIA?

NGOs are non-profit organizations that are independent of the government. However, they may be funded by government and international government organizations. NGOs aims to support the underprivileged primarily and also aims at creating awareness of things that are often ignored in our society. NGOs are active in education, public policy, health care, human rights and other areas based on their objectives.

Different laws governing NGO registration in India

  • Societies Registration Act, 1860
  • Indian Trusts Act, 1882;
  • Section 8 Company.

WHY DO WE NEED TO REGISTER NGOS?

If you wish to serve society, then the best way to do that is by NGO registration. There are various reasons for doing the same

  • They are self-governing bodies that seek to work for the betterment of the society by helping the poor and needy;
  • The primary goal of an NGO is to assist the underprivileged people and allow them to grow.

WHAT ARE THE DIFFERENT TYPES OF NGO REGISTRATION IN INDIA?

As we have discussed above, 3 laws regulate the functioning of NGOs registration process; similarly, there are 3 types of NGO registration. They are as follows:

  • Trust Registration
  • Society Registration
  • Section 8 Company
Let’s look at these types one by one

TRUST REGISTRATION

NGO registration done under the Trusts Act 1882 is called Trust Registration. The public charitable trusts or the private trusts are registered to help members of an uncertain and varying class. When you determine the trust as public or private, the ultimate question is whether the class to be benefitted constitutes a substantial segment of the public. A trust may be registered for varied purposes such as relief of poverty or distress, education, medical relief etc.

Benefits of Trust Registration

The benefits include:

  • Trusts get the land from the government;
  • Trust registered under the Trust Act can use government registered name;
  • Tax benefits
  • 80G certificate benefit under the Income Tax Act 1961;
  • While capital for building construction;
  • Benefits on service and entertainment tax.

SOCIETY REGISTRATION

Another way to register an NGO is by Section 8 Company registration. It is established for the purpose of encouraging and promoting art, science, charity, religion, etc. However, the earnings from the company cannot be used by the shareholders; instead, it’s used for fulfilling the objects of the company. One can register their company under Section 8 as private limited, public limited, one-person company or an LLP. Section 8 companies look to perform the task of welfare of society in any of the above-mentioned fields.

BENEFITS OF SECTION 8 COMPANY REGISTRATION

The benefits include:

  • No minimum capital requirement for establishing an NGO as Section 8 Company;
  • Section 8 company also holds its own identity and enjoys separate legal entity status;
  • One of the most significant advantages of this type of NGO registration is tax exemption. There are various types of tax exemptions under this type;
  • Such types of NGOs are exempted from payment of stamp duty applicable for the registration process;
  • No title required
  • There is better credibility in this type when compared with any other NGO structure;
  • Ease of transfer of ownership under Section 8 Company. People can transfer the ownership of moveable and immoveable assets without restrictions.

CONCLUSION

It can be concluded that NGO registration in India is done to help the underprivileged or to encourage and promote science, arts, literature etc. The profits gained are used for the well being and welfare of certain part of the societies.