35ac registration- a fund raising tool by ngo’s
DESCRIPTION
Section 35AC can be used as an effective tool of fund raising by NGO’s. It also beneficial to donor as they receive 100% rebate of income tax on the donated amount which makes a win-win situation for both.The objective of Section 35 AC is to encourage business organizations to contribute more in social and economic welfare and upliftment of general public. With the increased emphasis on the corporate social responsibility in the corporate sector and ostentatious display of charity by people like Bill Gates and Warren Buffet, the contribution in the monetary term by the corporate sector in India towards socially relevant project cannot be undermined.TRANSCRIPT
35AC Registration- A FundRaising tool by NGO’s in India
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Don’t just donate, donate right…..
As a human nature, everyone wants to help or togive for charitable cause, however, how can adonor/s cross check or investigate the moneywhich they have given is been use for the samecause or not?
Who is going to monitor NGOs or how cancontribution be monitored towards the largergood of the society or the cause?
This situation has also created problems forgenuine charitable organizations, who areactually working for the upliftment anddevelopment of society, as people startdistrusting them also and treating them as fraud.
Section 35 AC under Income Tax Act, 1961answer all such questions. Section 35ACregistration can be used as an effective tool offund raising by NGO’s. It also beneficial todonor as they receive 100% rebate of incometax on the donated amount which makes a win-win situation for both.
As a human nature, everyone wants to help or togive for charitable cause, however, how can adonor/s cross check or investigate the moneywhich they have given is been use for the samecause or not?
Who is going to monitor NGOs or how cancontribution be monitored towards the largergood of the society or the cause?
This situation has also created problems forgenuine charitable organizations, who areactually working for the upliftment anddevelopment of society, as people startdistrusting them also and treating them as fraud.
Section 35 AC under Income Tax Act, 1961answer all such questions. Section 35ACregistration can be used as an effective tool offund raising by NGO’s. It also beneficial todonor as they receive 100% rebate of incometax on the donated amount which makes a win-win situation for both. www.equicorplegal.com
Introduction
Section 35 AC of the Income Tax Act,1961, is one of the key provision whichis relevant for raising funds andresources for NGO’s if understood andused effectively.
The objective of Section 35 AC is toencourage business organizations tocontribute more in social and economicwelfare and upliftment of general public.With the increased emphasis on thecorporate social responsibility in thecorporate sector and ostentatious displayof charity by people like Bill Gates andWarren Buffet, the contribution in themonetary term by the corporate sector inIndia towards socially relevant projectcannot be undermined.
NGO’s involved in eligible projectsnotified by the Central Government forpromoting the social and economicwelfare can raise resources for eligibleproject from corporate sector and fulfiltheir objective of development.
Corporates simultaneously can fulfiltheir corporate social responsibilityaspect of the business by contributingtowards the eligible projects and gain byavailing deduction under Section 35 AC.Thus Section 35 AC can be used as aneffective tool of fund raising by theNGO’s. It can also lead to a mutuallybeneficial relationship between NGOsand the Corporate Sector.
Section 35 AC of the Income Tax Act,1961, is one of the key provision whichis relevant for raising funds andresources for NGO’s if understood andused effectively.
The objective of Section 35 AC is toencourage business organizations tocontribute more in social and economicwelfare and upliftment of general public.With the increased emphasis on thecorporate social responsibility in thecorporate sector and ostentatious displayof charity by people like Bill Gates andWarren Buffet, the contribution in themonetary term by the corporate sector inIndia towards socially relevant projectcannot be undermined.
NGO’s involved in eligible projectsnotified by the Central Government forpromoting the social and economicwelfare can raise resources for eligibleproject from corporate sector and fulfiltheir objective of development.
Corporates simultaneously can fulfiltheir corporate social responsibilityaspect of the business by contributingtowards the eligible projects and gain byavailing deduction under Section 35 AC.Thus Section 35 AC can be used as aneffective tool of fund raising by theNGO’s. It can also lead to a mutuallybeneficial relationship between NGOsand the Corporate Sector.
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SECTION 35AC
Section 35 AC provides that where a person or company incurs anyexpenditure by way of payments of any sum to :
A public sector company or;
A local authority or;
To an association or institution (NGOs) approved by the National Committee
For carrying out any eligible project or scheme for promoting the socialand economic welfare of the public as the Central Government mayspecify, then the amount so paid shall be allowed as deduction from thebusiness income of the assessee/contributor of such amount. In view ofNGO’s, the approved association or institution by National Committeecan raise funds for their approved from the eligible persons and donorscan avail the benefits of tax deductions
Section 35 AC provides that where a person or company incurs anyexpenditure by way of payments of any sum to :
A public sector company or;
A local authority or;
To an association or institution (NGOs) approved by the National Committee
For carrying out any eligible project or scheme for promoting the socialand economic welfare of the public as the Central Government mayspecify, then the amount so paid shall be allowed as deduction from thebusiness income of the assessee/contributor of such amount. In view ofNGO’s, the approved association or institution by National Committeecan raise funds for their approved from the eligible persons and donorscan avail the benefits of tax deductions
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Persons (Donors) eligible toContribute under Section 35AC
An individual;
A Hindu Undivided Family;
A Company;
A Firm;
An Association of persons or Body of Individuals, whetherincorporated or not;
A Local authority;
Every artificial juridical person not falling within any of thepreceding sub-clauses.
An individual;
A Hindu Undivided Family;
A Company;
A Firm;
An Association of persons or Body of Individuals, whetherincorporated or not;
A Local authority;
Every artificial juridical person not falling within any of thepreceding sub-clauses.
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Approval of a Project or Schemeby the National Committee
An application has to be made to National Committee which should contain thefollowing particulars and be accompanied with relevant documents:
Title of project or scheme, date of commencement, duration and likely dateof completion;
Estimated cost of project or scheme duly supported by a copy of theresolution of the Managing Committee of the applicant;
Classes of persons who are likely to be benefited from the project orscheme;
Affirmation that no benefit from the project or scheme, other thanremuneration or honorarium for whole time or part-time work done or forreimbursement of actual expenses related to the project will accrue to thepersons managing the affairs of the association or institution
An application has to be made to National Committee which should contain thefollowing particulars and be accompanied with relevant documents:
Title of project or scheme, date of commencement, duration and likely dateof completion;
Estimated cost of project or scheme duly supported by a copy of theresolution of the Managing Committee of the applicant;
Classes of persons who are likely to be benefited from the project orscheme;
Affirmation that no benefit from the project or scheme, other thanremuneration or honorarium for whole time or part-time work done or forreimbursement of actual expenses related to the project will accrue to thepersons managing the affairs of the association or institution
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Eligible Projects/Schemesincludes
Family Welfare and immunization
Tree plantation
Social Forestry
Development of Irrigation Resources
Rural Sanitation - Construction of lowcost latrines
Medical camps in rural areas
Rural Health Programs
Land development and recovering ofwaste land with special concern onecological improvement
Soil and water conservation includingharvesting of run off water
Non formal education and literacy,especially for children and women
Rural and non farm activities
Leprosy eradication
Creation of employment opportunities forurban and rural population living below thepoverty line
Supportive services for women to engage inproductive work (Children care of workingwomen)
Promotion of sports
Construction of dwelling units for theeconomically weaker sections
Construction of school building for childrenbelonging to the economically weakersections of the society
Establishment and running of non-conventional and renewable sources ofenergy systems
Any other program for uplift of the rural pooror the urban slum dwellers.
Family Welfare and immunization
Tree plantation
Social Forestry
Development of Irrigation Resources
Rural Sanitation - Construction of lowcost latrines
Medical camps in rural areas
Rural Health Programs
Land development and recovering ofwaste land with special concern onecological improvement
Soil and water conservation includingharvesting of run off water
Non formal education and literacy,especially for children and women
Rural and non farm activities
Leprosy eradication
Creation of employment opportunities forurban and rural population living below thepoverty line
Supportive services for women to engage inproductive work (Children care of workingwomen)
Promotion of sports
Construction of dwelling units for theeconomically weaker sections
Construction of school building for childrenbelonging to the economically weakersections of the society
Establishment and running of non-conventional and renewable sources ofenergy systems
Any other program for uplift of the rural pooror the urban slum dwellers.
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35 AC Registration Approval Process
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Documents requisite for 35 ACregistration
i. Bye Laws of NGO
ii. Copy of Registration Certificate;
iii. Copy of resolution with date & seal of theNGO, passed by the Board to undertake thework under S.35 AC of the IT Act;
iv. A brief note on Proposed Project;
v. Brief note on past activities & credentials ofManagement with details of experience inactivities similar to the object of proposedproject;
vi. Information regarding availability ofland/infrastructure to execute the project/land documents to be enclosed;
vii. Expenditure incurred as on date on theproposed project;
viii. Blue prints along with professional costestimates in support of constructionactivities;
ix. Income criteria for selection ofbeneficiaries/services to poor/weakersection of the society;
x. Information regarding recognition ofschool/training etc. from the concernededucation/technical board;
xi. Details of similar activities undertaken byNGO & theaccomplishments/achievements etc.;
xii. Annual Reports & Audited BalanceSheets for last 3 financial years;
xiii. Activity Reports of last 3 years;
xiv. Approval under Section 12 A & 80G of ITAct;
xv. Approval under FCRA, if any
i. Bye Laws of NGO
ii. Copy of Registration Certificate;
iii. Copy of resolution with date & seal of theNGO, passed by the Board to undertake thework under S.35 AC of the IT Act;
iv. A brief note on Proposed Project;
v. Brief note on past activities & credentials ofManagement with details of experience inactivities similar to the object of proposedproject;
vi. Information regarding availability ofland/infrastructure to execute the project/land documents to be enclosed;
vii. Expenditure incurred as on date on theproposed project;
viii. Blue prints along with professional costestimates in support of constructionactivities;
ix. Income criteria for selection ofbeneficiaries/services to poor/weakersection of the society;
x. Information regarding recognition ofschool/training etc. from the concernededucation/technical board;
xi. Details of similar activities undertaken byNGO & theaccomplishments/achievements etc.;
xii. Annual Reports & Audited BalanceSheets for last 3 financial years;
xiii. Activity Reports of last 3 years;
xiv. Approval under Section 12 A & 80G of ITAct;
xv. Approval under FCRA, if any
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Consult the Experts-ECA
Complete assistance for making the project report,necessary filings, applications etc. for obtaining 35ACregistration
Follow up support at various points in time during andafter the pendency of the application so as to ensurethat any additional documents/records requested byNational Committee is submitted in a systematic andtimely manner.
To know the further details about 35 AC registrationand raising funds by NGOs and other aspects, contactus at [email protected]
Complete assistance for making the project report,necessary filings, applications etc. for obtaining 35ACregistration
Follow up support at various points in time during andafter the pendency of the application so as to ensurethat any additional documents/records requested byNational Committee is submitted in a systematic andtimely manner.
To know the further details about 35 AC registrationand raising funds by NGOs and other aspects, contactus at [email protected]
www.equicorplegal.com
www.equicorplegal.com
www.equicorplegal.com
