REGISTRATION UNDER SECTION 35Ac
REGISTRATION UNDER SECTION 35Ac
The Central Government approves certain NGOs and notifies them as eligible for project or schemes for the purposes of section 35AC. If an NGO succeeds in getting such an approval for its projects then it stands a very good chance of mobilising funds from the corporate and the business sector. Business houses making contribution to such approved projects are allowed the benefits of deducting such contribution as expenditure.
NATIONAL COMMITTEE
The Central Government has constituted a National Committee to identify projects and schemes to be notified under section 35AC, such committee normally consists of eminent persons. All NGOs are entitled to apply to the National Committee to get its projects or schemes approved.
WHERE THE APPLICATION IS TO BE MADE
The application for approval by the National Committee should be made to the Secretary, National Committee for Promotion of Social & Economic Welfare, Dept. of Revenue, Govt. of India, North Block, New Delhi - 110001.
THE APPLICATION AND ITS ENCLOSURE
i) The application is to be made in 2 Sets, written either in Hindi or English.
ii) Details such as name, address and status of applicant, the district/ ward circle where assessed/PAN number.
iii) Audited Balance Sheet, Profit& Loss Account or Income& Expenditure Account for the latest year and two preceding years.
iv) How is it constituted i.e. whether as a trust, society, etc supported by relevant documents like trust deed, rules & regulation, memorandum of association etc. and registration certificate, if any.
v) Name & Addresses of the persons managing the affairs of the association or institution, including those who left the organisation but were managing the affairs of the association or institution during the 3 years preceding the date of application.
vi) If the association or institution is notified under section 10(23)(C) or is approved for the purposes of section 80G, the particulars of such approval granted.
vii) Brief particulars of the activities of the association or institution during 3 years preceding the date of application or since inception if the association or institution is less than 3 years old.
viii) Such other information as the association or institution may like to place before the National Committee.
ADDITIONAL INFORMATION REGARDING THE PROJECT/SCHEME TO BE SUBMITTED
(i) Title of project or scheme;
(ii) Date of commencement;
(iii) Duration and the likely date of completion;
(iv) Estimated cost of the project ;
(v) Category or class of persons who are likely to be benefited from the project or scheme;
(vi) Affirmation that no benefit from the project or scheme other than remuneration or honorarium, will accrue to persons managing the affairs of the NGO ;
(viii) Such other particulars as the applicant may place before the National Committee.
CERTIFICATE TO BE ISSUED TO THE DONOR
All approved NGOs are required to issue a certificate to the donor for all contributions & receipts under section 35AC. The certificate is to be issued in Form 58A.
This certificate will enable the donor to claim exemption from its taxable income. Further, the NGOs should also send an Annual Report to the National Committee indicating the progress of the work relating to the project/scheme and the following informations in respect of each contributor :
i) name of the contributors & their addresses.
ii) PAN.
iii) amount of contributions.
iv) the project/scheme for which the contribution is made.
v) total amount of contribution received during the year.
vi) total cost of the project approved by the National Committee.
07 Such Annual Report should reach the National Committee by 30th June, following the financial year in which the amount is received.
DEDUCTION OF CONTRIBUTION UNDER SECTION 80GGA
Section 35AC is available to assessees who have income from the head 'business' or 'profession'. Therefore, for the assessees who do do not have income from business or profession, section 80GGA provides for deduction on donations made to eligible projects under section 35AC. Section 80GGA, is a broader section and deductions are also available for contributions made for scientific research under section 35CCA & 35CCB, which have been withdrawn. 100 per cent deduction is available under section 80GGA, subject to the available gross total income under section 80A. Therefore, unlike section 35AC, deduction under section 80GGA cannot be carried forward in the form of losses to next year .
ADDITIONAL INFORMATION REGARDING THE PROJECT/SCHEME TO BE SUBMITTED
Any scientific research association / organization which has its objects, carrying out the scientific research or social science research or social science research can be approved under section 35 I(ii) and 35I(iii) in accordance with the guidelines and other conditions as may be notified in the official gazette of the central government.The donor will receive 175% weighted deduction on the donated amount as per amendment by the Finance Act 2010.
Application:- The application for approval under section 35 1 (ii) / 35 1 (iii) of IT Act 1961 may be submitted to the CIT/ DIT- IT of the jurisdiction of the assessee association along with following information in prescribed form.
List of assets / facilities owned used for scientific research / Social science research by the applicant,
Details of past research projects undertaken by the applicant, such as research projects completed/ underway/ any publication of research projects,
Past research activities such as whether any new product/process developed, approved, any product of import substitution,
Patents filed and details of the filing,
Whether any commercialization carried out of any such product/ process,
Earnings from such patents etc
Details of conferences/ seminars etc. held
Proposed research project to be undertaken,
List of the donors and amount received as donations,
Amount utilized in such research activities,
PROGRESS REPORT
The purpose of an Annual Report is to ensure that your organization communicates its past performance and future goals in a clear and concise way so as to convince and attract your shareholders and donors to continue their contributions.
Why it is important to write Annual Report :
An Annual Report is a single tool of marketing of NGO which is sent to various stakeholders of organization. Purpose of sending an annual report is to familiarize them with organization's objectives, mission, projects and people. Annual Report is very significant document for the donors of organization. Organization establishes its accountability towards their donors through annual report. In annual report, donors should be given concrete evidences of activities for which they have paid an amount. Annual report is a piece through which organization shows that donations made by them are used wisely. Annual report is a general document which helps organization in generating their trust in the society. Key purposes of having an Annual Report are as under.
- Submission of annual report is mandatory for any NGO at the time of filling their returns
- Annual report is given to donors, stakeholders, partners, and people with public figure to inform them about activities and impact of NGO
- Annual Report as an important instrument to establish credibility of organization Essentials of good Annual Report:
- The Annual Report contains a description of the main activities, a review of the progress and results achieved in the year; and information on the Board members' names, position in the Board, remuneration or reimbursement and should contain brief financial details
- Maintain a right balance between an informative and creative part of annual report.
- The design of your annual report is as important as its content. Both works together to project a professional image of your organization.
- Innovative graphic designs should be given in Annual Report to meet your projects goals
- Annual Report requires to be properly conceptualized with suitable size, format and paper
- People should feel "wow" while picking up your annual report.
- Be environment friendly and email your annual reports to stakeholders.
Useful templates for Annual Reports are given below :
Template I - Annual Report by Population Foundation of India
1. Index / Contents :
It contains the list of each chapter written in annual report. Precise relevant titles should be given to these chapters along with page numbers.
2. Governing Board :
Brief description about the people sitting on the board. Brief profile and achievements of Chairperson can be given in single paragraph
3. Advisory Council :
Brief description about the people sitting on the advisory council. Brief profile and achievements of Chairperson can be given in single paragraph
4. Statement by Chairperson or Vice-Chairperson :
One or two page note by any one of them that will explain the overall impact of the organization which has been made in the entire financial year. They can also mention about the major success stories and overall growth of organization in various aspects.
5. Acknowledgements :
Acknowledgements should be given to Board as well as advisors of organization. Also we need to mention the Funding Agencies, Corporates & Government Departments who have funded the organization through various projects.
6. Photo Memories of Governing Board for the ----------------------------------------- (Name of organization)
7. Quotes stating the success of the organization on one single page
8. Project Interventions :
This includes detailed report about the implementation of a particular project which explains the nature of activities undertaken, number of beneficiaries served through programme, achievements, nature of partnerships, new initiatives as well as scope for replication. It can also include the Success Stories. Photographs should also be included in this section which will be self explanatory for various activities.
9. Capacity Building :
Here you can mention about your efforts that you undertake to train the staff of your organization. It should explain all the components which you focused for capacity building of their own NGO. Number of training programmes, photographs, number of staff who attended the same should be written in this section.
10. Research Studies & Evaluation :
Explain about your monitoring & evaluation systems which will support your efforts. Write about your research activities undertook throughout the year. Give the information in such kind of documentation which will support your advocacy efforts. Explain about brief subject of research. Explain about your geographical focus. Explain your sample size and design followed by key findings. You can have a separate text box for the information of any activity which has been undertaken in the direction of research and advocacy.
11. Advocacy and Communication :
Explain your advocacy and communication strategies and initiatives. Give details about the people to whom you approach through advocacy efforts.
12. Scaling up the pilot projects :
Give description about the pilot projects which you have started to implement. It also explains the opportunity for the NGO across the sector.
13. Publications :
Give the names of all your publications and the brief introduction about each of them.
14. Financial Summary :
Give your audited balance sheet and statement of Income & Expenditure for the financial year ended.
