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

Detailed Legal Analysis

To set up a Section 8 NGO in Raipur, you need to follow specific requirements outlined under the Companies Act, 2013, and the rules prescribed therein.

Section 8 of the Companies Act, 2013, allows for the formation of a company for promoting charitable objectives such as commerce, art, science, education, and social welfare. The following are the key steps and requirements to establish a Section 8 NGO:

• Choose a Unique Name: The name must reflect the charitable nature of the NGO and not be similar to any existing entity. You can check name availability through the Ministry of Corporate Affairs (MCA) portal.
• Draft the Memorandum of Association (MoA) and Articles of Association (AoA): These documents must clearly state the objectives of the NGO, which should be non-profit in nature. Ensure compliance with the format prescribed under the Companies Act, 2013.
• Obtain Digital Signature Certificates (DSC): All proposed directors will need a DSC to sign electronic documents. This can be obtained from government-recognized certifying authorities.
• Get Director Identification Number (DIN): At least two directors are required, and each must obtain a DIN through the MCA portal.
• File Form INC-12: Submit the application for the license under Section 8 along with the MoA and AoA to the Registrar of Companies (RoC). The form must include details about the proposed directors and the NGO's objectives.
• Compliance with the RoC: The RoC will review the application, and upon satisfaction, grant a license to operate as a Section 8 company. This process may take a few weeks.
• Obtain PAN and TAN: After receiving the certificate of incorporation, apply for the Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) from the Income Tax Department.
• Open a Bank Account: Open a bank account in the name of the NGO to facilitate financial transactions.

Regarding tax benefits, a Section 8 NGO enjoys several advantages:

• Exemption Under Sections 80G and 12A: Registration under Section 12A of the Income Tax Act, 1961, allows for tax exemptions on income, while donations made to the NGO can be claimed as deductions under Section 80G.
• Goods and Services Tax (GST) Benefits: Certain activities of NGOs may be exempt from GST, depending on the services provided.
• Access to Government Grants: Section 8 companies are eligible for various grants and funding opportunities from the government and international organizations.

By following these steps and understanding the tax benefits, you can successfully establish a Section 8 NGO in Raipur.