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

Detailed Legal Analysis

To set up a Section 8 NGO in Saharanpur, you need to adhere to specific requirements and understand the tax benefits available under Indian law.

A Section 8 company is formed for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, and protection of the environment. Here are the steps and requirements to establish one:

• Minimum Requirements:
  • A minimum of two directors is required, and they can be individuals or companies.
  • Directors must be above 18 years of age.
  • There should be a minimum of two members, who can also be the directors.
• Name Reservation:
  • Choose a unique name that reflects the objectives of the NGO.
  • Apply for name reservation via the Ministry of Corporate Affairs (MCA) portal.
• Drafting of Memorandum and Articles of Association:
  • Prepare the Memorandum of Association (MoA) and Articles of Association (AoA), specifying the NGO's objectives and governance structure.
• Filing with the Registrar:
  • File the incorporation application along with the MoA and AoA with the Registrar of Companies (RoC).
  • Pay the required registration fees.
• License under Section 8:
  • Obtain a license under Section 8 of the Companies Act, 2013, which allows not-for-profit companies to operate.

Once the NGO is established, it can avail of several tax benefits:

• Section 80G of the Income Tax Act:
  • Donors can claim a deduction for donations made to the NGO, enhancing fundraising capabilities.
  • The deduction can be either 50% or 100%, depending on the type of NGO.
• Section 12A Registration:
  • Registering under this section allows the NGO to access certain exemptions and benefits under the Income Tax Act.
• Exemption from Goods and Services Tax (GST):
  • NGOs may be exempt from GST on certain services and donations, depending on the nature of their activities.

By following these steps and understanding the tax benefits, you can successfully set up a Section 8 NGO in Saharanpur.