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

Detailed Legal Analysis

To set up a Section 8 NGO in Siliguri, you must comply with the provisions of the Companies Act, 2013, specifically under Section 8, which allows the formation of a non-profit organization aimed at promoting charitable activities.

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

• Minimum Members: You need at least two directors and two members. The members can be individuals or other entities.
• Object Clause: The primary objective of the NGO must be charitable in nature, targeting social welfare, education, health, or other similar causes.
• Name Reservation: Choose a unique name for your NGO and apply for name reservation using the RUN (Reserve Unique Name) facility on 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) outlining the objectives and rules governing the NGO.
• Incorporation Application: File the incorporation application (Form INC-12) with the Registrar of Companies (RoC) along with the requisite documents, including:
  • Name reservation application
  • MOA and AOA
  • Identity and address proof of members and directors
  • Affidavit from directors
• License Issuance: Upon satisfaction with the documents submitted, the RoC will issue a license under Section 8, allowing you to operate as a non-profit organization.

In addition to the above requirements, running a Section 8 NGO provides various tax benefits under Indian laws:

• Tax Exemption: NGOs registered under Section 8 can apply for tax exemptions under Section 12A and 80G of the Income Tax Act, 1961, which allows donors to receive tax deductions on their contributions.
• FCRA Registration: If the NGO intends to receive foreign donations, it must also register under the Foreign Contribution (Regulation) Act, 2010.
• CSR Funding: Section 8 NGOs are eligible to receive CSR (Corporate Social Responsibility) funding from Indian companies as per the Companies Act, 2013.

Establishing a Section 8 NGO in Siliguri involves careful planning and adherence to legal requirements, ensuring that your organization can effectively contribute to societal welfare while enjoying the associated tax benefits.