NGO Registration

All three are legal vehicles for non-profit activity in India, but they differ in governing law, governance structure, and regulatory oversight. A Trust is created by a Trust Deed under the Indian Trusts Act 1882 or a state Public Trusts Act; it is controlled by Trustees with relatively flexible internal governance. A Society is registered under the Societies Registration Act 1860 with a Managing Committee elected by its members — suitable for membership-based organisations. A Section 8 Company is licensed under the Companies Act 2013 and subject to the full governance framework of the Act — Board meetings, statutory audit, MCA filings — but is the most credible structure for pan-India operations and for receiving foreign grants and CSR funding.

The right structure depends on your specific situation. Section 8 Company: recommended for organisations planning pan-India operations, foreign grant funding (FCRA), large CSR partnerships, or institutional grants where the funder requires MCA-governed entities. Trust: suitable for smaller, locally-focused charitable work, religious endowments, and family trusts where governance flexibility and lower compliance overhead is valued. Society: best for membership-based bodies — clubs, professional associations, cultural organisations — or in states where Society registration has a long-established track record. There is no single universally correct answer.

Section 12AB of the Income-tax Act grants tax-exempt status to the income of a registered charitable or religious trust or institution. Without 12AB registration, the organisation's income — including donations, grants, and any interest earned — is taxable at the normal rates. Provisional 12AB registration (valid for 3 years) can be applied for before the organisation commences activities. After provisional registration, a final 5-year registration is obtained. 12AB is mandatory for any organisation that wants to ensure its income is not subject to income tax.

Section 80G of the Income-tax Act allows donors — both individuals and companies — to claim a deduction of 50% to 100% of the amount donated to approved institutions, subject to qualifying limits. For the donating company, this makes donations to an 80G-approved organisation partially tax-deductible, which significantly increases the practical willingness to donate. For individual donors, a 50% deduction reduces their taxable income. Not having 80G approval effectively puts your organisation at a competitive disadvantage against other NGOs that hold it.

The Foreign Contribution (Regulation) Act, 2010 (FCRA) regulates the receipt of contributions (money, articles, or securities) from foreign sources by Indian persons and organisations. An Indian NGO cannot lawfully receive any foreign contribution — including grants from foreign foundations, international NGOs, foreign government aid agencies, or donations from foreign individuals — without either FCRA registration or FCRA prior permission. FCRA registration requires a minimum of 3 years of existence as a registered entity, defined programme activity, and audited accounts for the prior 3 years. The application is made to the Ministry of Home Affairs. Once granted, FCRA registration is valid for 5 years and must be renewed by filing Form FC-3C within 6 months before expiry — it does not remain valid indefinitely.

No. An organisation must have a minimum of 3 years of existence as a legally registered entity before it can apply for regular FCRA registration. Prior to completing 3 years, an organisation can apply for FCRA Prior Permission for each specific foreign contribution, provided the foreign source and the specific activity are identified and approved by MHA. FCRA Prior Permission is a more cumbersome process and is not a substitute for regular registration in the long term.

NITI Aayog's NGO-PS Darpan portal is a national database of registered voluntary and non-profit organisations in India. Darpan registration is mandatory for any organisation seeking grants from the Central Government, grants from State Governments that participate in the Darpan framework, or any scheme administered through the NGO-PS portal, and is commonly checked by CSR donors as a credibility signal. It is free of cost and obtained online after the entity has PAN and a registration certificate. Note that Darpan registration on its own does not make an entity eligible to receive CSR funds under Section 135 / Schedule VII of the Companies Act — that requires a separate Form CSR-1 registration with the MCA.

Yes. Under Section 135 of the Companies Act 2013, companies meeting the threshold (net worth of ₹500 crore or more, OR turnover of ₹1,000 crore or more, OR net profit of ₹5 crore or more in any financial year) must spend 2% of their average net profits on CSR activities through implementing agencies. To be an implementing agency, an NGO must: be registered as a Section 8 Company, Trust, or Society; hold valid 12AB and 80G registration; be registered with the MCA by filing Form CSR-1 (which is the actual statutory eligibility gateway); typically also hold NITI Aayog Darpan registration as a credibility signal for donors; and have a minimum of 3 years of operational track record. CSR Rule 4 of the Companies (CSR Policy) Rules 2014 (as amended) governs these requirements.

Receiving foreign contributions without FCRA registration or prior permission is an offence under Section 37 of the FCRA 2010. Penalties include forfeiture of the foreign contribution, imprisonment of up to 5 years, and a fine. The organisation's registration can also be cancelled under the FCRA, and key office-bearers can be personally named in legal proceedings. The enforcement of FCRA has been significantly strengthened in recent years — this is not a theoretical risk.

Yes. A Section 8 Company is subject to the full governance requirements of the Companies Act 2013, subject to certain relaxations granted by MCA. It must hold at least 4 Board meetings per financial year (not more than 120 days between consecutive meetings), hold an AGM within 6 months of the financial year end, maintain proper minutes, conduct a statutory audit, and file AOC-4 (financial statements) and MGT-7 (annual return) with MCA annually. These obligations apply regardless of the scale of the organisation.

Yes. All three structures — Section 8 Company, Trust, and Society — can own movable and immovable property in their own names. For a Section 8 Company, property is held in the company's name as a legal entity. For a Trust, property is held in the name of the Trust (through its Trustees). For a Society, property is held in the name of the Society. The key governance requirement is that the property must be used for the stated charitable objects — using organisational property for personal benefit of Trustees or Directors constitutes a breach of fiduciary duty and risks income-tax exemption withdrawal.

An organisation holding valid 12AB registration is exempt from income tax on its income from property held under Trust / Society, income applied to charitable or religious purposes in India, and income accumulated for future application (subject to the 15% accumulation limit under Section 11). Essentially, income that is applied to the stated charitable objects is not taxable. Income from a business run by the organisation is taxable unless the business is incidental to the charitable objects and its profits are applied entirely to those objects. Specific income-tax provisions — Section 11 through Section 13 — govern the exemption and its conditions.

Every organisation holding FCRA registration must file an annual return (Form FC-4) disclosing all foreign contributions received and utilised during the financial year. The return must be filed on the FCRA Online portal (fcraonline.nic.in) by 31 December of the year following the financial year — e.g., the return for the year April 2024 to March 2025 must be filed by 31 December 2025. The return must be accompanied by the audited income and expenditure statement and balance sheet for the FCRA designated account. Failure to file attracts suspension or cancellation of FCRA registration.

Yes. A Section 8 Company can pay reasonable salaries to its employees, including professional staff. Directors and Trustees can receive remuneration for services rendered in a professional capacity (e.g., a doctor working as medical director of an NGO hospital, or a lawyer providing legal counsel), provided the remuneration is reasonable, properly documented, and approved in accordance with the company's Articles of Association and applicable Board/member approval requirements under the Companies Act. However, under Section 8(1)(b) of the Companies Act 2013, no dividends can be paid to shareholders, and no portion of profits can be distributed to members. The distinction is between reasonable, service-linked remuneration versus profit distribution.

There is no statutory minimum corpus for a Charitable Trust in most states under the Indian Trusts Act 1882. However, some states under their Public Trusts Acts may have practical expectations about the corpus size relative to the Trust's stated objects. A Trust Deed must include an initial contribution by the Settlor — even a nominal amount — to constitute the Trust. For income-tax purposes, a corpus donation is treated differently from revenue income — it is not included in the computation of income applied for charitable purposes under Section 11. PNPC advises on the corpus structure at the drafting stage.

Under the FCRA (Amendment) Act 2020 and the FCRA Rules 2011 (as amended), all FCRA-registered organisations must receive foreign contributions exclusively in a designated FCRA bank account maintained at the State Bank of India, New Delhi Main Branch (NDMB). No other bank account can be used for receiving foreign contributions, even if the organisation has a regular operations bank account at another bank. Utilisation of received foreign funds can be from this SBI NDMB account or can be transferred to a designated utilisation account at any other scheduled bank in India.

Conversion from a Trust or Society to a Section 8 Company is possible but involves a court-supervised process and legal costs. For a Trust, the conversion requires a court order sanctioning the scheme of arrangement, followed by application to MCA for the Section 8 licence, and fresh registrations for 12AB, 80G, and FCRA in the new entity's name. For a Society, the conversion process varies by state. In both cases, the 3-year FCRA eligibility clock begins again for the new entity unless MHA grants continuity — which is not guaranteed. Planning the right structure from the outset avoids these costs.

The GST applicability to an NGO depends on the nature and value of the services it provides. Services provided by a charitable or religious organisation are exempt from GST in specific circumstances — for example, religious services, free meals to the poor, charitable activities as defined under the GST exemption notifications. However, if an NGO charges fees for services (e.g., training programmes, consultancy, publications), sells goods, or makes inter-state supplies above the threshold, GST registration and compliance may be required. The exemption is narrow and must not be assumed — each service must be evaluated separately.

A Section 8 Company requires a minimum of 2 directors (at least one of whom must be an Indian resident — physically present in India for at least 182 days in the preceding calendar year under Section 149(3) of the Companies Act 2013) and minimum 2 shareholders (the same individuals can be both directors and shareholders). A Trust typically requires a minimum of 2 Trustees under most state Acts, though the ideal governance practice is 3–5 Trustees. A Society requires a minimum of 7 persons for the Memorandum of Association under the Societies Registration Act 1860.

The statutory CSR spending mandate under Section 135 of the Companies Act 2013 applies only to 'companies' meeting the prescribed thresholds — an LLP is not a company under the Companies Act and is not itself subject to the Section 135 mandate, though an LLP may still choose to donate voluntarily to an NGO outside the CSR framework (in which case ordinary income-tax donation rules, including 80G, would apply to the LLP as donor). For companies that are covered by Section 135, CSR funds can be channelled through: Section 8 Companies, registered trusts, registered societies, and Section 12A-registered entities established by the Central or State Government — provided these entities have an established track record of at least 3 years in carrying out activities in the relevant field and are registered with the MCA by filing Form CSR-1 under Rule 4(2) of the CSR Policy Rules. The implementing organisation must file Form CSR-1 on the MCA portal, certified by a practising CA, CS, or Cost Accountant, and obtain a CSR Registration Number (format CSR00XXXXXX).

ITR-7 is the income-tax return form applicable to entities claiming exemption under Sections 139(4A) to 139(4F) of the Income-tax Act — including charitable and religious trusts / institutions, political parties, research associations, and news agencies. A Section 8 Company, Trust, or Society holding 12AB exemption files ITR-7 annually. The due date for ITR-7 for entities requiring tax audit (which most non-profits do) is 31 October of the assessment year (i.e., 31 October following the end of the financial year). ITR-7 must be accompanied by the relevant audit report — Form 10B or 10BB — with the applicable form determined by the entity's income level and specific circumstances (such as receipt of foreign contributions), as prescribed under the CBDT rules.

Under the CBDT rules governing audit reports for 12AB / 10(23C)-approved entities (as revised by Notification 7/2023), the choice between Form 10B and Form 10BB is based on income thresholds and specific circumstances, not on entity type. Form 10B applies where the entity's total income (before giving effect to the Section 11/12 exemption) exceeds ₹5 crore in the financial year, OR the entity has received any foreign contribution during the year, OR the entity has applied any part of its income outside India during the year. Form 10BB — the simpler report — applies in all other cases. A Section 8 Company, Trust, or Society holding FCRA registration will therefore generally need Form 10B (because it receives foreign contributions), regardless of its income level. The audit report must be furnished along with ITR-7 by the due date. These forms were revised effective from April 2023 with significantly expanded disclosure requirements.

Yes. Foreign nationals and NRIs can be Trustees of a Trust or Directors of a Section 8 Company. For a Section 8 Company, the requirements are the same as for any Private Limited Company director — apostilled passport, foreign address proof, and DSC via video KYC. For a Trust, the Trust Deed must accommodate foreign Trustees and the Charity Commissioner / Sub-Registrar in some states may have additional requirements. However, for FCRA purposes, the presence of foreign nationals in key positions of an organisation's governance is subject to MHA scrutiny. FCRA 2010 restrictions on persons of foreign origin in FCRA-registered entities must be observed.

An NGO opens a bank account in the name of the organisation — not in the names of individual Trustees or Directors. Required documents typically include: registration certificate (COI / Trust registration / Society registration), PAN of the organisation, constitutional documents (Trust Deed / MoA + Rules / Section 8 MoA + AoA), resolution of the Board / Trustees / Managing Committee authorising the bank account opening and naming the authorised signatories, identity and address proof of each authorised signatory. PNPC prepares the complete bank account opening documentation kit as part of the post-registration package.

No. One of the specific features of a Section 8 Company under Section 8(4) of the Companies Act 2013 is that it is not required to include 'Private Limited' or 'Limited' in its name. The organisation's name can simply reflect its mission — for example, 'National Centre for Research on Education' or 'Clean Ganga Foundation' — without the commercial company suffix. This is a meaningful distinction that helps Section 8 Companies present as mission-driven organisations rather than commercial entities.

Under Section 11(1)(a) of the Income-tax Act, a registered charitable or religious institution is allowed to accumulate up to 15% of its income in any financial year without applying it to charitable purposes, and such accumulated amount remains exempt from income tax. For example, if an NGO receives ₹1 crore in donations and grants, it can retain ₹15 lakh as an accumulated surplus (without specific purpose) and still claim full exemption on that amount. Income accumulated beyond 15% requires a specific declaration of purpose (Form 9A) filed before the due date of filing of the return, and must be applied within a maximum of 5 years.

Yes. Indian organisations — individuals and companies — can donate to registered NGOs without any specific prior approval (unlike foreign contributions which require FCRA). Corporate donations are subject to the donor's own income-tax treatment: if the donation is to an 80G-approved organisation, the donor can claim the applicable deduction. CSR spending by eligible companies to registered implementing organisations under Schedule VII is a separate channel with its own eligibility requirements. There are no restrictions on the amount of domestic donations an NGO can receive, though all donations must be properly disclosed in audited accounts.

The registration of a Section 8 Company involves two stages. First: incorporation as a company under the Companies Act 2013 via SPICe+ — the standard company incorporation process that results in a Certificate of Incorporation (COI) with a CIN, PAN, and TAN. Second: application for the Section 8 licence from the Central Government (Central Licensing Authority) — this involves submitting the incorporated company's details, the MoA and AoA, and a declaration by the promoters that the company's income will be applied solely to its stated charitable objects and no dividend will be paid to shareholders. The licence application is filed through Form INC-12 on MCA. On approval, a licence in Form INC-16 is issued.

The annual compliance cost for a Section 8 Company includes: statutory audit fee, ITR-7 filing with Form 10B, AOC-4 and MGT-7 MCA filings, Board meeting documentation, AGM, DIR-3 KYC for all directors, and — if FCRA registered — the FCRA annual return. For a small Section 8 Company with limited transactions, estimated annual compliance cost with a professional CA firm is in the range of ₹50,000 to ₹1,50,000 depending on transaction volume, number of directors, and whether FCRA or CSR filing obligations apply. PNPC offers fixed-fee annual retainer packages covering the full compliance cycle.

Under the current income-tax framework (post-Finance Act 2020), provisional 12AB and 80G registrations are valid for 3 years, and final registrations for 5 years. If the organisation fails to apply for renewal at least 6 months before the expiry date, the registration lapses on expiry. Once lapsed, all income received after the lapse date is taxable at normal rates. 80G lapse means donors cannot claim deductions — which is immediately visible to donors and impacts inflow. Renewal requires filing Form 10AB and satisfying the CIT (Exemptions) of continued charitable activity.

Yes, but with restrictions. Under Section 11(5) of the Income-tax Act, a registered charitable or religious trust is required to invest its funds (other than funds applied for charitable purposes) only in specified forms of investments — primarily government securities, public sector bonds, scheduled bank fixed deposits, post office schemes, and similar specified instruments. Investment in private company shares or real estate (other than for actual use) is generally not permitted for an organisation claiming income-tax exemption under Section 11. Investments outside the prescribed modes risk withdrawal of the Section 11 exemption.

A Society registered under the Societies Registration Act 1860 is a membership-based organisation governed by a Managing Committee elected by its members. Unlike a Section 8 Company, a Society is regulated at the state level — each state has its own registering authority and may have supplemental state-level Acts. A Society does not have the concept of 'share capital' — members contribute their time, expertise, or a nominal membership fee. Societies are commonly used for professional associations, recreational clubs, literary bodies, and local charitable organisations. The Companies Act 2013 compliance framework does not apply to Societies.

Yes. PNPC has operating offices in Chennai, Bangalore, Hyderabad, and Dubai. For organisations with cross-border charitable activities — Indian NGOs receiving UAE-sourced donations, NRI-founded charities operating in India, or UAE-based organisations with India operations — we provide coordinated advisory from both jurisdictions. In the UAE, charitable organisations and associations are typically registered with the Community Development Authority (Dubai) or the relevant Emirate-level authority, and civic/non-profit associations are governed under UAE federal legislation on associations and civic organisations, alongside AML/CFT-related Cabinet decisions applicable to non-profit organisations. We advise on the UAE structure, its UAE Corporate Tax implications, and the interface between the Indian FCRA framework and the UAE-side charitable structure.

Registration timelines vary by structure. Section 8 Company: incorporation via SPICe+ typically takes 3–6 weeks for the COI; Section 8 licence (INC-12) adds a further 4–8 weeks, depending on MCA processing. Trust: registration before the Sub-Registrar or Charity Commissioner typically takes 2–6 weeks depending on the state. Society: registration before the Registrar of Societies typically takes 3–8 weeks. Post-registration: 12AB and 80G provisional registration typically takes 2–6 months. FCRA registration: 3–12 months (only eligible after 3 years of existence). NITI Aayog Darpan: 1–2 weeks once PAN and registration certificate are available.

Three things: depth, continuity, and dual-jurisdiction capability. Depth: we draft constitutional documents specifically for your organisation — not from templates. The objects clause, governance provisions, and succession mechanisms are built for your mission, your funding sources, and your regulatory environment. Continuity: we stay with you from registration through 12AB, 80G, Darpan, FCRA, and annual compliance for the life of the organisation. Our engagement does not end when the registration certificate arrives. Dual-jurisdiction: our Dubai office means India-UAE non-profit structures are advised and executed as a single, coherent engagement — not referred between two firms who must brief each other from scratch.