What is NGO Compliance?
NGO compliance refers to the statutory obligations that Non-Governmental Organizations must fulfill to maintain their legal status, tax exemptions, and eligibility for funding. These compliances are governed by the Income Tax Act, Companies Act (for Section 8 companies), Societies Registration Act, and the Foreign Contribution Regulation Act (FCRA).
Non-compliance can lead to heavy penalties, loss of 12A/80G status, cancellation of FCRA registration, and even deregistration of the NGO.
Compliance by NGO Type
The compliance requirements vary based on the legal structure of the NGO:
- Trusts: Governed by the Indian Trusts Act, 1882 (or state-specific Public Trust Acts). Compliance is relatively simpler but includes annual audits and ITR filing.
- Societies: Governed by the Societies Registration Act, 1860. Requires filing of annual list of governing body members and audited accounts with the Registrar of Societies.
- Section 8 Companies: Governed by the Companies Act, 2013. Has the most stringent compliance requirements, including filing annual returns (AOC-4, MGT-7) with the ROC.
Annual Compliance Checklist
Key annual compliances for all NGOs include:
- Income Tax Return (ITR-7): Mandatory filing every year, regardless of income.
- Audit: Statutory audit by a Chartered Accountant if gross receipts exceed the basic exemption limit.
- 12A & 80G Renewal: Periodic renewal of tax exemption certificates.
- Form 10BD: Filing statement of donations received.
- Annual General Meeting (AGM): Holding an AGM within 6 months of the financial year end.
FCRA & CSR Compliance
FCRA Compliance
For NGOs receiving foreign funds:
- Annual Return (FC-4): Must be filed by 31st December every year.
- Quarterly Intimation: Reporting receipt of foreign funds on the FCRA portal.
- Bank Account: Maintaining a designated FCRA bank account in SBI, New Delhi Main Branch.
CSR Compliance
For NGOs receiving CSR funds:
- Form CSR-1: Mandatory registration to be eligible for CSR funding.
- Reporting: Providing utilization certificates and impact assessment reports to corporate donors.
Documents Required for Annual Compliance
- Registration Certificate (Trust Deed/Society Certificate/COI).
- PAN Card of the NGO.
- Audited Financial Statements (Balance Sheet, Income & Expenditure A/c, Receipts & Payments A/c).
- Bank Statements for the financial year.
- Details of Governing Body members/Trustees/Directors.
- 12A and 80G Registration Certificates.
- FCRA Registration Certificate (if applicable).
- Minutes of Board Meetings and AGM.
Compliance Calendar (FY 2024-25)
| Compliance | Due Date |
|---|---|
| Form 10BD (Donation Statement) | 31st May |
| ITR-7 Filing (Non-Audit) | 31st July |
| ITR-7 Filing (Audit Cases) | 31st October |
| AOC-4 (Section 8 Co.) | 30 days from AGM |
| MGT-7 (Section 8 Co.) | 60 days from AGM |
| FC-4 (FCRA Return) | 31st December |
