Concept of CSR
Companies should consider not only their profitability and growth but also the interests of society and the environment by taking responsibility for the impact of their activities on stakeholders, the environment, consumers and employees. It’s a legal responsibility that casts upon a corporate body to address the socio-economic-environment issues the nation faces.
The Companies Act, 2013- Section 135 of the Companies Act along with The Companies (CSR Policy) Rules 2014 and Schedule VII has introduced the concept of CSR in India to the forefront.
CSR activities have 2 ends:
The Company as the principal
The end beneficiary(ies) as the destination
Permanent Account Number
A PAN Card is an important document for financial transactions and tax purposes. It is a taxpayer’s permanent identification number allotted by the income-tax department. PAN once allotted remains valid forever unless it is cancelled or changed by the department.
An NGO can apply for a PAN Card by submitting an application form along with supporting documents to the Income Tax Department. An NGO needs a PAN Card to open a bank account, receive foreign funds, and file tax returns.
Necessity and uses of PAN
(i) in the income-tax return and in all other correspondences with the income-tax department.
(ii) in all challans for payment of any tax, interest and penalty due under the Income-tax Act.
(iii) opening of a bank account.
(iv) to get the CSR number
(v) Registration under DARPAN website of Niti Ayog.
(vi) For getting Section 12A registration and obtaining certification under Section 80g of the Income Tax Act.
Under Section 272B of the Income Tax Act 1961, the penalty for not having a PAN Card is provided. According to the Income Tax Department website, a penalty of INR 10,000 can be levied.
NGO Registration/Revalidation Under Section 80G and Section 12A
NGOs have multiple options to select the form of constitution, like trust, society and section 8 company. NGOs primarily rely on donations to support their functioning. To make these funds exempt from taxation, NGOs register under Section 80G and Section 12A of the Income Tax Act. This cannot be obtained without Darpan registration now.
80G registration helps you receive donations and issue exemption certificates to those who have contributed to your NGO. Whereas 12A registration exempts your NGO’s excess income over expenditure from income tax purview.
Overview of registrations under 80G
If an NGO gets itself registered under section 80G then the person or the organisation making a donation to the NGO will get a deduction of 50% from his/its taxable income.
New Registrations-
An application for fresh registration will be given to Principal Commissioner or Commissioner. A provisional registration for 3 years will be given to organisations, which will be valid for three years.
Application for renewal of such new registration needs to be submitted
-at least six months prior to the expiry of the validity period or
-within 6 months from the commencement of activities, whichever is earlier.
The registration has to be revalidated every 5 years. The re-application has to be made six months before the date of expiry of the registration.
Conditions to be fulfilled under Sec 80G
a) The NGO should not have any income which is not exempted, such as business income. If the NGO has business income then it should maintain separate books of accounts and should not divert donations received for the purpose of such business.
b) The bylaws or objectives of the NGOs should not contain any provision for spending the income or assets of the NGO for purposes other than charitable.
c) The NGO is not working for the benefit of a particular religious community or caste.
d) The NGO maintains regular accounts of its receipts & expenditures.
e) The NGO is properly registered under the Societies Registration Act 1860 or under any law corresponding to that act or is registered under section 8 of the Companies Act 2013.
Overview of registration under 12A
Earlier registration under 12A was given as one-time registration and once the registration is granted it will hold good till cancellation. From 1st April 2021, all new registration will be given for 5 years only, and the organisation has to apply for renewal after every 5 years.
An application for fresh registration under section 12A will be given to Principal Commissioner or Commissioner, as per provisions of section 12AB. A provisional registration for 3 years will be given to organisations.
Application for renewal of such new registration needs to be submitted.
The application for the renewal of registration (after five years) needs to be submitted at least six months prior to the expiry of the validity period.
Mandatory Requirement of Darpan Id for registration under 80 G & 12A
The organisations applying for registration/ revalidation as per the amended provisions of section 80G & 12A, is mandatorily required to give the details of their Registration number with the Darpan portal of Niti Aayog.
Benefits of registration under 80G and 12A
1. With this Registration, more capital is allowed for charitable activities through tax exemption over NGO income
2. Only 12A and 80G registered NGOs in India are allowed to accept international funding with exemption available under FCRA, 2010
3. To get the CSR number
4. Grants and funds are permitted from recognised Agencies, Government, and International Sources
