15 July 2009
Hi, Even if sec. 40A apply to NGO , there will be no tax implications. because even after adding such expenses the net income will be exempt from tax.
15 July 2009
Some people believe that NGOs are automatically exempt from income-tax. This is not true. You need to apply for income tax exemption. After that you need to follow certain conditions in order to remain exempt. Additionally, there are other requirements which affect an NGO’s working. Broadly there are three types of registration. Basic registration means that the NGO will not have to pay income tax2 on its surplus3. This is the most important registration and every NGO should have it. Next comes registration for TDS4. NGOs have to deduct income tax when they make payments to some people. After deducting tax, this is deposited with the Government. Third is the approval for donors. These approvals mean that your donors will have to pay less income tax whenever they donate money to you.
15 July 2009
Under Income Tax Act4, loans of Rs.20,000 or more have to be taken or repaid by crossed account payee cheque or draft. Applies for NGOs also.
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