Complications in NGO Compliance? No More!

Overview of NGO Darpan Registration

NGO Darpan is a portal operated by the Ministry of Rural Development, Government of India, for the registration and reporting of non-governmental organisations (NGOs) that receive funding from the government.

The portal provides a platform for NGOs to register and update their information and file reports on the utilisation of funds and the activities they have undertaken. If you are an NGO seeking to register with NGO Darpan, you must first ensure that your organisation meets the eligibility criteria set by the government.

This includes being a non-profit organisation working in rural development or poverty alleviation, among others. You can find more information about the eligibility criteria and the registration process on the NGO Darpan portal. Furthermore, completing NGO Darpan Registration is mandatory to possess any credibility as a non-profit organisation.

Documents Required for NGO Darpan Registration

• Copy of the registration certificate as a PDF or JPG
• Pan card of NGO
• PAN and Aadhaar card copies of 3 members in the executive committee
• Name of NGO/VO
• NGO address
• Registration number
• Date of registration
• Details of three members who are on the executive committee
• Details about funding from the government and chief area of working.

NGO Registration/Revalidation Under Section 80G and Section 12A

NGOs primarily rely on donations to support their functioning. To make these funds exempt from taxation, NGOs register under Section 80G and Section 12A of the Income Tax Act. This cannot be obtained without Darpan registration.

80G registration helps you receive donations and issue exemption certificates to those who have contributed to your NGO. Whereas 12A registration exempts your NGO's excess income over expenditure from income tax purview.

Moreover, recent changes have mandated that all the NGOs who have already registered under these 2 sections get re-validated under sections 80G and 12A to continue enjoying those tax benefits.

The overall process may take up to three months, and the application shall be made within 1 week from the documents' submission date. The registration has to be revalidated every 5 years. The re-application has to be made six months before the date of expiry of the registration.

Documents Required NGO Registration/Revalidation

• Documents Required NGO Registration/Revalidation
• Pan Card of NGO
• NGO address
• Registration number
• Date of registration
• PAN and Aadhaar card copies of 3 members in the executive committee
• Name of NGO/VO
• Details of three members who are on the executive committee
• Details about funding from the government and chief area of working.

NGO Compliance Darpan

NGO Darpan Registration: All NGOs that receive funding from the government must register with the NGO Darpan portal. This portal was launched by the Ministry of Rural Development in 2014 to improve transparency and accountability in the NGO sector. The registration process is relatively simple and can be completed online.

CSR-1 Registration: With effect from April 1, 2021, all NGOs that receive corporate social responsibility (CSR) funds from companies must register with the Ministry of Corporate Affairs (MCA) through Form CSR-1. This form requires NGOs to provide information about their activities, finances, and governance.

Section 80G and 12A Registration: NGOs that are registered under Section 80G of the Income Tax Act, 1961, are eligible for tax deductions for donations made by individuals and companies. To be eligible for registration under Section 80G, NGOs must meet certain requirements, such as being a non-profit organization and having a board of directors that is at least 50% independent. NGOs that are registered under Section 12A of the Income Tax Act, 1961, are exempt from paying income tax. To be eligible for registration under Section 12A, NGOs must meet certain requirements, such as being a non-profit organization and using their funds for charitable purposes.

CSR-1 Registration

CSR-1 registration is a process that non-governmental organisations (NGOs) in India must undergo to receive corporate social responsibility (CSR) funding from companies. CSR funding is a requirement for companies with a net worth of over ₹500 crores, a turnover of over ₹1,000 crores, or a net profit of over ₹5 crores

If you are operating an NGO and seeking CSR funding, it is mandatory to register with the MCA by filing Form CSR-1 as soon as possible. The MCA will review the application and may request additional documentation or clarification. If the application is approved, the NGO will receive a CSR-1 registration certificate, which allows them to receive CSR funding from companies.

Form CSR-1 is for the ‘Registration of Entities for Undertaking CSR Activities’. All entities planning CSR projects must submit this form to the MCA portal. CSR-1 registration is usually done within one week of the submission of all documents.

Documents Required for CSR-1 Registration

• Copy of PAN card of the NGO registration
• Mail ID and mobile number
• Details of Governing Body Members
• Copy of registration certificate
• NGO Darpan ID
• Digital Signature of the authorised person with their PAN.
• Check out the full information on CSR-1 registration here

Section 8 Companies Annual Compliances

Section 8 companies, also known as non-profit organisations, are required to comply with certain annual compliances to maintain their status as a charitable organisation.

If you are a Section 8 company, you can opt for our annual compliance package designed specifically for Section 8 companies. The preliminary list of compliance tasks that are required and will be done for you under the package are listed below:

• Appointment of an auditor
• Maintenance of a register
• Convening statutory meetings
• Report by directors
• Financial statements of the company
• Tax returns
• Filing of financial statements
• Filing returns.

Form 10BD Statement & Certificate of Donation

Section 80G of the Income Tax Act 1961 provides a donation deduction. Prior to the last financial year, there was no way to verify the accuracy of the donations paid. Tax deductions were allowed by the income tax department based on the claim made by the assessee or, at most, on the copy of the donation receipt presented by the assessee.

By notification no. 19/2021, dated 26 March 2021, the CBDT has notified Forms 10BD and 10BE to facilitate greater transparency and accuracy in reconciling deductions claimed by the assessee and donations received by charitable organisations.

What Is Form 10BD & 10BE?

During the course of the fiscal year, the Charitable Organizations receive donations in the form of Form 10BD, which contains the details of the donations they received: form 10BD filing procedure and time limit. Donation-receiving organisations are required to file the form electronically.

Upon completion of the form, a digital signature of a person authorised to sign the return of income shall be used. Alternatively, it can be submitted via Electronic Verification Code (EVC). Each financial year, the form must be filed. For the financial year 2021-22, the deadline for filing the form is 31 May. Form 10BD requires information such as the name and address of the donor, the amount of the donation, and the method by which the donation was received.

Income Tax will issue a certificate in form 10BE containing information about the charitable organisation, such as the name of the organisation, its PAN, its address, and its approval number u/s 80G & 35(1), as well as the details of donations and donors. There is a procedure for correcting any inadvertent errors or mistakes in Form 10BE by filing a correction form (filing Form 10BD again with the corrections).

Consequences of Non-filing of Form 10BD

A fee of ₹200/- per day of delay will be charged to the reporting entity if it fails to file Form 10BD as mandated by section 234G of the Act. Failure to file the statement of donation in Form 10BD will also attract a penalty under section 271K, which shall not be less than ₹ 10,000/- and may extend to ₹1,00,000.

Why Vakilsearch?

We have a team of expert lawyers and chartered accountants who will completely take care of the NGO registration process. We will set up a call with you and explain the nuances of NGO registration. We will also file the CSR-1 registration on behalf of your organisation. Our process is completely transparent, and you will get timely updates from us. You can get assistance from our team of experts if you have any questions during the registration process. We provide legal services at an affordable price in a hassle-free way.