I want to set up a Section 8 NGO in Bareilly, what are the requirements and tax benefits?

Detailed Legal Analysis

To set up a Section 8 Non-Governmental Organization (NGO) in Bareilly, you need to follow specific requirements stipulated under the Companies Act, 2013, and comply with certain regulatory guidelines.

Here are the key steps and requirements for establishing a Section 8 NGO:

• Define the Objectives: The organization must be established to promote charitable objectives such as commerce, art, science, education, social welfare, or environmental protection as per Section 8(1) of the Companies Act, 2013.
• Choose a Unique Name: The name of the NGO should be unique and not similar to any existing company or trademark. It must end with "Foundation," "Forum," "Association," or "Society."
• Draft the Memorandum and Articles of Association: These documents should outline the NGO's objectives, rules, and regulations. Ensure compliance with Section 8 of the Companies Act, 2013.
• Apply for a License: File an application to the Registrar of Companies (RoC) for a license under Section 8. This requires submitting forms (e.g., Form INC-12) along with the drafted Memorandum and Articles of Association.
• Obtain Digital Signature and Director Identification Number (DIN): All proposed directors must obtain a DIN and a digital signature for the filing process.
• Incorporate the NGO: Once the license is granted, file Form INC-22 along with the required documents to complete the incorporation process.
• Register for Tax Exemptions: Apply for registration under Section 12A of the Income Tax Act, 1961, for tax exemption on income. Additionally, apply for Section 80G to allow donors to claim tax deductions for their contributions.
• Compliance with Other Laws: Depending on the activities, comply with other local regulations, such as the Foreign Contribution (Regulation) Act, 2010 if you will receive foreign donations.

Regarding tax benefits:

• Income Tax Exemption: Under Section 12A of the Income Tax Act, the NGO is exempt from paying income tax on surplus income, provided it is used for charitable purposes.
• Deduction for Donors: Registration under Section 80G allows donors to claim a deduction of 50% on their contributions to the NGO.
• Goods and Services Tax (GST) Exemptions: Certain activities undertaken by Section 8 NGOs may also qualify for GST exemptions.

By following these steps, you can successfully establish your Section 8 NGO in Bareilly and avail of the associated benefits.