‘NGO’ is now a widely used word denoting to
registered trusts, societies, cooperative societies,
endowments, non-profit companies, etc. working for the
welfare, development and progress of people and in a way
supplement similar functions of the state and hence, called as
Non-Government Organisations (NGOs). It is not a technical
word; rather it is used in a common parlance.
With the increasing role of private groups in
achieving welfare objectives of governments, the nomenclature
‘Non-Governmental Organisations (NGOs)’ came into
currency. What were earlier called as Voluntary Organisations
(VOs) or Voluntary agencies (VAs) have gradually transformed
to a great extent as NGOs denoting that they are working with
partial or full support of government funds in achieving
certain welfare goals of society. However, the NGOs have some
peculiar characteristics to qualify so. That an NGO is:
A group of private individuals agreed to work for some expressed
cause or causes.
A non-profit making body.
A duly registered/recognised body working within the framework of
approved rules and regulations.
An outfit having duly constituted management body.
An organisation assisting in empowerment of people.
A non-political entity engaged to help, assist and cooperate with
people to alleviate their conditions.
An organised, independent, democratic and non-sectarian group of
An organisation that fulfills requirements of approved norms and
government criteria essential for governmental grants i.e.
due registration, three years’ contribution in the field
of social service, etc.
A Non-Governmental Organisation (NGO) can
run as a registered or non-registered group of people. However,
it is better to get it registered under any preferred law,
particularly when it is going to deal with the government
frequently or interested to avail officially permitted public
funds or foreign donations and grants. Before deciding for a
particular kind of registration of an NGO, its various benefits
should be understood in the wake of objectives set for its
A Society is a democratic body registered under the Indian
Societies Act, 1860. NGO intending to have an open participation
of large number of people in its functioning and decision making
must be registered as a Society. At times Registrar of Societies
has the power to intervene in the elections of office-bearers
and functioning of the organisation.
Trust is a closer system of a registered body with limited
membership. It can be a family trust or a public trust. Election
of office-bearers is not compulsory.
Under the provisions of Indian Companies
Act, 1975, an organisation can be registered for charitable purposes
as Non-Profit Company, meaning no profit
of the company will be distributed among its promoters or directors.
This is specially suitable for activities leading to economic welfare
and micro-finance. ...more
A Cooperative Society can run economic and business activities
for the benefit of its members.
WAQF / ENDOWMENT
A Waqf or Endowment
is also an NGO running according to the Waqf Deed. However, it does
not avail the benefits enjoyed by a Society or Trust or a Non-Profit
12 A OF INCOME TAX ACT
Registration of an organisation under the
Clause 12 A
of Indian Income Tax Act 1961 is required for preventing its income
from deduction by the Department of Income Tax.
80G OF INCOME TAX ACT
The provision of Clause
of the Income Tax Act provides tax exemption to a donor of a duly registered
FOREIGN CONTRIBUTION REGULATION ACT (FCRA)
NGOs intending to receive funds and
donations from other countries should first registered under the
provisions of Foreign Contribution Regulation Act, 1976. Either permanent
registration or prior permission for a specific contribution can be sought
from the FCRA Section of Ministry of Home Affairs. A registered
NGO having existence for at least three years can be registered under
Registration of NGOs under the provisions
of 35AC of the Income Tax Act is less known but a highly useful
instrument of fund raising for some social cause. The objective
of the said provision is to encourage business organisations and
wealthy individuals to contribute more in social and economic
welfare and uplift of general public.
100% One hundred per cent deduction is
allowed to donors for contribution(s) made to organizations
approved under section 35(1)(ii) such as scientific research
institutes or a university, college, or other institution)
specifically for “scientific research” and under section
35(1)(iii) specifically for “research in social science or