02 September 2014
To get the benefits under the Income Tax Act, Section 25 Company has to get registered under two distinct sections:
1. Section 12AA A Section 25 Company can get itself registered u/s 12AA of the Income Tax Act and can get the benefit of accumulation of its income to some extent for utilization in future years. Thus its income shall not be taxable if it gets registered under Section 12AA.
2.Section 80G If a Section 25 Company gets itself registered under Section 80G, any donor donating the amount to such a company shall be entitled to a deduction to the extent of 50% of the sum donated from its income.
3.Audit under the income tax act The Income Tax Act provides for mandatory audit of accounts of such companies provided the total income without giving effect to the provisions of section 11 & 12 exceeds the prescribed amount.The audit report is to be submitted in Form No. 10B and must be duly signed by the Auditor, being a chartered accountant.
List of documents to be prepared and need to be submitted to department as follows -
Dully filled in Form - 10A for registration u/s 12A registration; Dully filled in Form - 10G for registration u/s 80G registration; Registration Certificate and MOA /Trust Deed (two copies - self attested by NGO head); NOC from Landlord (where registered office is situated); Copy of PAN card of NGO; Electricity Bill / House tax Receipt /Water Bill (photocopy); Evidence of welfare activities carried out & Progress Report since inception or last 3 years; Books of Accounts, Balance Sheet & ITR (if any), since inception or last 3years; List of donors along with their address and PAN; List of governing body I board of trustees members with their contact details; Original RC and MOA /Trust Deed for verification; Authority letter in favor of NGO Factory; Any other document I affidavit / undertaking I information asked by the Income Tax department.
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