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

Detailed Legal Analysis

To set up a Section 8 NGO in Jodhpur, you need to follow specific legal requirements and processes as stipulated under the Companies Act, 2013, particularly under Section 8.

Here are the key requirements and steps to establish a Section 8 NGO:

• Objectives: Clearly define the NGO's objectives aimed at promoting arts, education, charity, protection of the environment, or other activities beneficial to society.
• Minimum Members: You need a minimum of two directors if it is a private company and three if it is a public company, along with a minimum of two subscribers to the memorandum of association.
• Name Approval: Choose a unique name for the NGO and apply for name approval through the Ministry of Corporate Affairs (MCA) via the RUN (Reserve Unique Name) service.
• Drafting Documents: Prepare the following documents:
  • Memorandum of Association (MoA)
  • Articles of Association (AoA)
  • Declaration of compliance (Form INC-14)
  • Affidavit from the directors (Form INC-9)
• Filing with MCA: File the incorporation documents with the Registrar of Companies (RoC) along with Form INC-12 to seek a license under Section 8.
• Obtaining License: Upon verification, the RoC will issue a certificate of incorporation along with a license to operate as a Section 8 company.

Regarding tax benefits, Section 8 NGOs enjoy several incentives:

• Tax Exemptions: Under Section 80G of the Income Tax Act, 1961, donations made to Section 8 companies are eligible for tax deductions for the donors.
• Exemption from Income Tax: Section 12A of the Income Tax Act allows for income tax exemptions on income earned by NGOs if they are registered under this section.
• Goods and Services Tax (GST): Certain services provided by NGOs may be exempt from GST, enhancing the financial viability of the organization.

For compliance, ensure timely filing of annual returns and financial statements with the RoC and adhere to regulations under the Companies Act, 2013, and Income Tax Act, 1961.