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NGO / Trust / Society

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Non-governmental organisations (NGO) are legally recognised trusts, cooperative societies, non-profit corporations, and other organisations that work for the welfare, advancement, and growth of the general public (NGOs).

NONPROFIT TRUST

Public charity trusts are those established for the purposes of advancing education, public health, alleviating poverty, etc. that are recognised as charitable by law. Public charity trusts must be established for the benefit of the general public, notwithstanding the fact that they lack an official definition.

To be eligible to seek for tax-exemption, public charity trusts must register with the office of the Charity Commissioner with authority over the trust.

SOCIETY

A group of people who gather together to carry out the act's benevolent objectives are referred to as a society. Despite a few significant distinctions, societies and trusts have many characteristics. A society must consist of at least seven people, but only two people are needed to constitute a trust.

The Societies Registration Act of 1860, which many states have modified, governs societies. The state's Registrar of Societies, which has jurisdiction, is where the society must be registered.

Nonprofit Organizations

According to Section 8 of the Companies Act of 2013, these organisations may be founded to advance commerce, the arts, education, charity, research, social welfare, science, sports, religion, or other causes, as long as all profits and other sources of income are used to advance the organization's goals and no members receive dividends. With the foundation, the term "Section 8 Company" can be concluded without the inclusion of the words "Limited" or "Private Limited."
The incorporation of a Section 8 Company is similar to that of a trust, society, or non-profit organization, except that a Section 8 Company is registered with the Ministry of Corporate Affairs of the Central Government, whereas trusts and societies are registered with the government.

Section 12A Registration will assist an NGO/ Trust to offer tax exemptions, whereas 80G Registration comes under Section 80G of Income Tax Act, which provides benefits to the donor of NGO/Trust.

What is section 12A?

Section 12A of the Income Tax Act, 1961 allows Charitable Trusts, Societies, Non-Profit Organizations, Religious Institutions, etc., to claim total tax exemption as per sections 11 and 12 of the Income Tax Law. Non-Profit entities are meant for charitable activities, but they have income and which is taxable as per normal rates if not registered under section 12A of the Income Tax Act.

What is section 80G?

Objective of Section 80G is to encourage more donors to donate funds to Non-Profit entities, and which allows their donors to deduct the sum paid as donations by them from their gross total income. In order to get deduction from his income, the donor need to attach 80G Certificate which can be issued only by NGOs registered under Section 80G.

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