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Running an NGO (Non-Governmental Organization) requires not only dedication to a social cause but also a deep understanding of legal and financial obligations. Annual compliance is an essential part of operating an NGO in Yamuna Vihar, Delhi. It ensures transparency, proper management of funds, and smooth operations, preventing any legal complications in the future. Failing to adhere to annual compliance can result in penalties, loss of credibility, and in some cases, even the cancellation of registration.
This article will explain the Annual compliance requirements for NGOs in Yamuna Vihar, Delhi, focusing on different types of NGOs—Trusts, Societies, and Section 8 Companies—and the processes involved. PayOur Tax provides end-to-end support to help NGOs maintain compliance, ensuring a seamless process.
Compliance with government regulations is crucial for all organizations, including NGOs, to continue their operations without legal hindrances. Annual compliance is essential for several reasons:
In India, NGOs can be registered under three main categories—Trusts, Societies, and Section 8 Companies. Each type has different compliance obligations that must be met annually.
Trusts are registered under the Indian Trusts Act, 1882 or respective state acts, and their compliance requirements include:
Maintenance of Accounts: Trusts must maintain proper records of all financial transactions. The accounts should be audited annually by a certified auditor.
Filing of Income Tax Returns: Every Trust, regardless of income, must file an income tax return. If the Trust has applied for and obtained 12A and 80G certificates, it must ensure proper utilization of funds to continue receiving tax benefits.
Form 10B: Trusts that have 12A registration must file Form 10B, an audited financial statement. This should be submitted before the deadline set by the Income Tax Department.
Donor Receipts: Trusts must issue receipts to donors for their contributions, which they can use to claim tax deductions under Section 80G.
Societies are governed by the Societies Registration Act, 1860 and have several compliance requirements, including:
Annual General Meeting (AGM): Societies must hold an Annual General Meeting (AGM) every year to discuss key matters such as the society’s performance, future plans, and financial statements.
Filing of Annual Return: After conducting the AGM, societies must submit an annual return, including the list of governing body members and financial statements, to the Registrar of Societies.
Audit of Accounts: All societies must maintain a record of their financial accounts, which should be audited annually by a certified auditor.
Filing of Income Tax Returns: Like Trusts, Societies must also file their income tax returns annually, regardless of their income. Societies holding 12A and 80G certifications must ensure compliance with the requirements to continue receiving tax benefits.
Section 8 Companies are registered under the Companies Act, 2013, and they are required to follow more stringent compliance norms compared to Trusts and Societies:
Board Meetings: Section 8 Companies must conduct at least two board meetings annually, with a minimum gap of 90 days between them.
Annual General Meeting (AGM): Like other companies, Section 8 Companies must hold an AGM within six months from the end of the financial year.
Filing of Financial Statements and Annual Return: Section 8 Companies must file financial statements (Form AOC-4) and an annual return (Form MGT-7) with the Registrar of Companies (ROC) every year.
Audit of Accounts: It is mandatory for Section 8 Companies to audit their accounts annually by a qualified auditor.
Filing of Income Tax Returns: Section 8 Companies must file their income tax returns annually. If they hold 12A and 80G certification, they must comply with additional reporting requirements to retain these exemptions.
Failure to comply with annual regulations can result in:
At PayOur Tax, we understand the complexity of annual compliance for NGOs, and we offer comprehensive services to ensure your organization meets all regulatory requirements. Our services include:
Annual compliance is a critical part of running a successful and legally sound NGO in Yamuna Vihar, Delhi. Whether your NGO is registered as a Trust, Society, or Section 8 Company, staying compliant with government regulations is essential to maintaining your organization’s integrity and legal status. Failure to adhere to these rules can result in hefty fines, legal troubles, or even deregistration.
By partnering with PayOur Tax, NGOs can streamline their compliance process and focus on their core mission of social welfare. With our expert guidance, you can ensure that your NGO remains compliant year after year.
PayOur Tax, a renowned firm based in New Delhi, India, offers an extensive range of services in accounting, taxation, labor law compliance, corporate governance, and business management, catering to Indian and international businesses of all sizes, from startups to large enterprises. With deep expertise and years of experience, we specialize in delivering comprehensive, end-to-end business solutions that ensure seamless operational success and regulatory compliance.