Question 1

What is the difference between a trust, society and Section 8 company?

Accepted Answer

A trust is the simplest, governed by a trust deed and state law; a society needs a minimum membership and is governed by the Societies Registration Act with more democratic governance; a Section 8 company is governed by the Companies Act with the highest compliance and credibility, often preferred for institutional and CSR funding.

Question 2

What are 12A and 80G registrations?

Accepted Answer

12A (now 12AB) registration exempts a charitable entity's income from tax subject to application of funds; 80G registration lets donors claim a deduction for their donations. Both are now granted for limited periods and must be renewed, with provisional registration available for new entities.

Question 3

When is FCRA registration required?

Accepted Answer

Any entity wishing to receive foreign contributions must register under the Foreign Contribution (Regulation) Act, or obtain prior permission for a specific donation, and route all foreign funds through the designated SBI New Delhi main-branch account. Annual FC-4 returns and strict end-use and administrative-expense limits apply.

Question 4

Can an NGO be a CSR implementing agency?

Accepted Answer

Yes, if it is registered with the MCA in Form CSR-1 and meets the eligibility (a registered trust/society/Section 8 with 12A and 80G and a three-year track record, or set up by the company/government). We handle CSR-1 registration and the related reporting to funder companies.

Question 5

What audit and reporting must a charitable entity do?

Accepted Answer

An entity with income above the exemption limit must have its accounts audited and file Form 10B/10BB along with the income-tax return, maintain books and donation records, file FCRA returns if applicable, and issue utilisation certificates to funders. We manage the full annual compliance calendar.

Question 6

How much can an NGO spend on administrative costs under FCRA?

Accepted Answer

FCRA caps administrative expenses at 20% of the foreign contribution utilised in a financial year. Defining what counts as administrative versus programme expenditure requires care; we set up the accounting so the entity stays within the limit and can demonstrate compliance.

NGO, Trust & Section 8 / Charitable

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