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You can create a non-profit NGO in India by registering it as Trusts, Societies and Sec. 8 Companies and then you can apply for 80G and 12A Registration for Income Tax benefits.
If an organization has obtained certification under section 80-G of Income Tax Act then donors of that NGO can claim exemption from Income Tax.
Income of an organization is exempted if NGO has 12-A registration.
Benefits registering a NGO in form of Section 8 Company:
There are three common forms of not-for-profit Organisations: Trusts, Societies and Sec. 8 Companies.
Section 8 Company Registration are limited companies formed under the Companies Act having limited liability of members. Such company can be formed with just two persons if formed as a private limited company and can operate in any state without any additional formalities.
The Government grants them a special license under sec. 8 to drop the words ‘Private Limited’ or ‘Limited’ from their name.
Section 8 Company Registration must be formed for charitable objects and its Income and profits should be applied towards these purpose only, Further It should not pay any dividend to its members.
Following are the process to set up Section 8 (Limited company):
1. Obtain Director Identification number (DIN) & Digital Signature Certificate (DSC) :
2. Name Approval:The name should be unique and the name shall include the words foundation, Forum, Association, Federation, Chambers, Confederation, council, and the like etc.
3. Make Application for grant of License under section 8 and get License.
