Companies covered by Society are exempt from the stamp duty that applies to other companies. Discover more in the post about Society income tax provisions.
A corporation that seeks to promote the arts, business, science, technology, education, athletics, charity, welfare programs, religious, or other like goals is referred to as a Society under the Companies Act of 2013. This blog details about Income Tax Provisions for Society. To register ITR For Section 8 Company, you can always visit Vakilsearch. We have a team of legal experts who can provide complete guidance to register a Sec 8 company.
Characteristics of Society
Directors and shareholders: A minimum of two shareholders and two directors are required for the corporation, and both the shareholders and the directors may be the same person.
Adaptability: Article 8 Compared to a public business, a company needs to complete fewer legal requirements. According to company law, Section 8 company are entitled to unique exemptions and privileges.
Independent legal entity: Society are businesses formed under the 2013 Companies Act that are separate juridical entities from their owners.
Lacking dividend: There is no dividend paid to the section 8 company’s members.
Advantages of Society Incorporation
- Since a Section 8 Company is a department that the Central Government has allowed, the organisation’s mission and goal can carry out a wide range of operations with fidelity and integrity
- Compared to societies or other types of charitable organisations, Society have a greater reputation
- Due to its stringent administrative compliances, it presents a more trustworthy image to external & internal users of information than societies
- Society receive necessary funding and permissions from the government and other organisations, unlike Societies or Trusts.
Mandatory Criteria for a Society Company
Capital: Society companies are not subject to any minimum capital requirements.
Documents: Identity proofs such as a voter ID, an Aadhaar card, a driver’s license, or a passport are necessary; for foreign nationals, a passport is an obligatory requirement for the proof of identity; proofs of residence such as an electricity bill, a telephone bill, a mobile bill, or a bank statement; and Income-tax PAN is a mandatory condition for Indian nationals.
If the premises are rented, the rent agreement, the most recent rent receipt, a copy of the most recent utility bill in the landlord’s name, and a no objection letter from the landlord are required as proof of the Registered Office address;
If the premises are possessed by either the Director or the Promoters, any documents proving ownership, such as a sale deed, a house tax receipt, etc., together with the no objection letter, are necessary.
Shareholder: Forming a Society company requires a minimum of two shareholders.
Directors: Two directors are required at a minimum (shareholders and directors may be the same person), and at least one director must reside in India Capital.
You should seek the advice of legal professionals for a hassle-free Society company registration process. Vakilsearch is here to protect you from any complications that might arise due to Income Tax Provisions for Society.
Exemptions & Reliefs Available To Society Under Different Laws, Rules, and Regulations
ITR for Society under the 2013 Companies Act
- When calculating the maximum number of directorships allowed under Section 165 of the Company Act, directorships in Society are not taken into account
- A Society can hold at least one meeting every six months as opposed to 4 meetings annually
- Rather than requiring 21 days ‘notice, a general meeting could be called with just 14 days’ notice
- A Society is exempt from the requirement to record the minutes of its meetings, meetings of the board, and other decisions. However, if the Company’s articles provide confirmation from the distribution of minutes, the time of meetings is documented no later than 30 days after the meeting’s conclusion
- A Society may also contain an enterprise
- The appointment of a verified corporate secretary has not required for Society organisations
- Society is not covered by provision 178 of the Companies Act
- Employing secretarial standards is also free
- Society are exempt from Section 149.1 of the Companies Act; hence they are not needed to name an Independent Director. Furthermore, a Society Company’s Audit Committee is not obliged to have Independent Directors on its Board for the reasons mentioned above
- ITR for a Society Company under the Income Tax Act of 1961
- If a corporation operates for “charitable causes” as described in Section 2.15 of the 1961 Income Tax Assessment act, then Society Company is exempt from several income tax regulations. A range of extra tax deductions and exemptions are also available to them under Subsection 80G of the Income Tax Act of 1961
- Each Society is eligible for the following exemptions and reliefs
- Society firms are subject to much-reduced stamp duty requirements than other businesses. Contributors are eligible for a 50% tax benefit for their donations under Society of the Income Tax Act of 1961 Company
- The Central Government establishes a number of regulations every year to offer non-profit companies tax exemption conditions that are more favourable
- According to Society, it is valid for a period of one to three years. In the event that a Society organisation is formed under Society of the Income Tax Assessment Act, profits would be completely exempt, and no taxes would be due by the companies.
Conclusion
We really hope that this thorough post has answered all of your issues regarding the ITR For Section 8 Company. The Income Tax Act mandates the filing of returns by entities that perform social activities, including foundations, organisations, and corporations, with property investment used for philanthropic and religious purposes, healthcare, academic institutions, and others. The abovementioned businesses are required to submit the ITR-7 Form together with their income tax returns.
If you need any help regarding Society company, Vakilsearch can help you with the entire process. We provide end-to-end services for company registration, PAN and GST registration, and annual filing. Get started today with Vakilsearch and make your business journey easier and hassle-free. Visit Vakilsearch to learn more about Society Company.
