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

Detailed Legal Analysis

To set up a Section 8 NGO in Kohima, you need to follow specific requirements and understand the tax benefits associated with such an organization. A Section 8 company is formed under the Companies Act, 2013, aimed at promoting charitable objectives.

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

• Choose a Suitable Name: The name should reflect the charitable objectives and must end with 'Foundation', 'Association', 'Society', etc. It is subject to approval from the Registrar of Companies (RoC).
• Draft the Memorandum of Association (MoA) and Articles of Association (AoA): These documents must clearly outline the NGO's objectives, governance structure, and the manner of operation. The MoA should specify the intention to apply profits for charity and not for personal gain.
• Obtain Director Identification Number (DIN): All proposed directors must acquire a DIN by applying through the Ministry of Corporate Affairs (MCA) portal.
• File for Incorporation: Submit Form INC-12 along with the MoA, AoA, and other required documents to the RoC. You will also need to pay the requisite fee based on the authorized capital.
• Apply for License: After incorporation, you must apply for a license under Section 8 of the Companies Act, 2013, which allows you to operate as a non-profit organization.
• Register under Income Tax Act: Apply for 12A registration to avail tax exemption on income and 80G certification for donors to receive tax deductions on their contributions.

In addition to these requirements, a Section 8 NGO enjoys several tax benefits under the Income Tax Act, 1961:

• Exemption on Income: Section 11 and Section 12 of the Income Tax Act provide tax exemption on income derived from property held under trust for charitable purposes, provided the NGO is registered under Section 12A.
• Tax Deduction for Donors: Under Section 80G, donors can claim a deduction of 50% of the amount donated to the Section 8 NGO, subject to certain conditions.
• Goods and Services Tax (GST) Benefits: Services provided by a Section 8 company for charitable purposes may be exempt from GST under specific conditions.

By following these steps and understanding the benefits, you can successfully establish and operate a Section 8 NGO in Kohima, contributing to societal welfare while leveraging tax advantages.