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

Detailed Legal Analysis

To set up a Section 8 NGO in Dibrugarh, you need to comply with the requirements laid out in the Companies Act, 2013 and obtain the necessary approvals from the Registrar of Companies (RoC).

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

• Definition and Purpose: A Section 8 company is established for promoting charitable objectives such as social welfare, education, commerce, art, science, sports, research, etc., as per Section 8 of the Companies Act, 2013.
• Minimum Requirements:
  • A minimum of two directors is required for the company.
  • There should be a minimum of two members (which can be the same as the directors).
• Name Reservation:
  • Choose a unique name for the NGO that reflects its objectives.
  • File Form SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) for name availability with the Ministry of Corporate Affairs (MCA).
• Drafting of Documents:
  • Prepare the Memorandum of Association (MoA) and Articles of Association (AoA) that state your NGO's objectives and rules.
  • Include a clause stating that the profits will not be distributed to any member.
• Filing for Incorporation:
  • Submit the incorporation application along with the MoA, AoA, and other required documents to the RoC.
  • Pay the required registration fees as per the prescribed fee structure.
• Compliance with the Income Tax Act:
  • Apply for 12A registration under the Income Tax Act, 1961 to avail tax exemptions on income.
  • Obtain 80G certification to allow donors to claim tax deductions on their contributions.

Tax Benefits: Section 8 companies can enjoy several tax benefits:

• Exemption from income tax under Section 11 and 12 of the Income Tax Act, provided they meet the criteria for charitable activities.
• Donors can claim deductions under Section 80G for contributions made to the NGO, which incentivizes donations.

By following these steps and ensuring compliance with the relevant laws, you can successfully set up a Section 8 NGO in Dibrugarh.