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What to check for a genuine charity

Posted Tue, 20/10/2009 - 06:15 by admin

1. Is the charitable organisation registered in the state with the charity commissioner or at the district level or at the national level? Is it registered as a trust or society or section-25 company?
2. Is the registration active and valid?
3. What is the registration number?
4. Are the donations exempt from Income tax under 80G clause?
5. What are the objectives of the charity?
6. Who are the trustees?
7. Where is the annual report of the charity?
8. How much is the annual income and annual expenditure of the charity?

Indian law to form NGO

Posted Tue, 20/10/2009 - 05:23 by admin

Overview

A Non Profit Organisation can be registered in India as a Society, under the Registrar of Societies or as a Trust, by making a Trust deed. A third option is registration as a section-25 Company under the Companies Act, 1956.

Whether a trust, society or section-25 company, the Income Tax Act, 1961 gives all categories equal treatment, in terms of exempting their income and granting 80G certificates, whereby donors to non-profit organisations may claim a rebate against donations made. Foreign contributions to non-profits are governed by FC(R)A regulations and the Home Ministry.

For an organisation to be termed as a Charity it requires Income tax clearances under 12 A Clause of Income Tax Act. Section 2(15) of the Income Tax Act defines ‘charitable purpose’ to include ‘relief of the poor, education, medical relief and the advancement of any other object of general public utility’. A purpose that relates exclusively to religious teaching or worship is not considered as charitable.

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