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Contact :


Mr. Dhirendra

dk@samanvaya.org


Mr. Raghu Mishra

raghu@samanvaya.org


Legal Aspect - Samanvaya - The Team


Legal Work

To provide consultancy to form a Trust, Society or Private Limited Company as per the rules & regulations of Society Registration Act of Govt. of India.

To apply PAN Card
To apply 12 A
To apply 80G
To apply 35 AC
To apply 35 AC (1&2)
To apply 35 A C (1&3)
To apply FCRA
To apply 35 CCB

CO-OPERATIVES BANKS

Multi-State Cooperative Society

Key information’s

About Trust Trust is defined in section 3 of the Trust Act, 1882 as " an obligation annexed to the ownership of property and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another or of another and the owner. In simple words it is a transfer of property by the owner to another for the benefit of a third person along with or is a transfer of property by the owner to another for the benefit of a third person along with or without himself or a declaration by the owner, to hold the property not for In India, the second most popular form of registration is as a Trust. However, the statutory provisions, procedures and the laws relating to trusts are confusing. Under Indian Laws, various kinds of public and private trusts can be formed. Here, we have dealt with the laws and procedures related to Public Charitable Trusts. Himself and another.

The Indian Trust Act, 1882 is not applicable to Public Charitable Trust. There is no specific act under which a Public Trust is to be registered, except in the State of Gujarat and Maharastra. Public Trusts are formed under general law, with guidance drawn from the Indian Trust Act, 1882. The other relevant acts are Religious Endowment Act, 1863, Charitable & Religious Trust Act, 1920 and The Bombay Public Trust Act, 1950.

The following are the basic ingredients of a valid trust :

  1. There must be an author or settler of the trust. The author or the settler refers to the person who sets aside certain property for the benefit of the beneficiaries
  2. There must be a trustee. The trustees are the persons who manage this property for the benefit of the beneficiaries as per the Trust Deed. The author himself may or may not become a trustee.
  3. There must be a beneficiary or beneficiaries.

A society is essentially an association of persons (seven or more) united together to achieve some common purpose. Such objects are normally charitable, scientific, literary etc. Theoretically, a society need not be registered but registration gives the society legal recognition and is essential for opening of bank accounts, filing of legal suits, obtaining Income Tax approvals, lawful vesting of properties etc.

A society is registered under the Societies Registration Act, 1860. In addition various states have framed their respective acts and rules for ensuring propriety in functioning of societies, including provisions for compulsory division, amalgamation or dissolution. The registration is done under the auspices of the various state governments in whose territories the 20 organization is located. An organization can be registered in any district of India with the Assistant Registrar of Societies within that district.

A society is a distinct legal entity entirely independent of the members constituting it. Thus, it can sue or be sued independent of its members. No member either independently or jointly can claim ownership rights in the assets of a society during its existence. On its dissolution, the surplus assets are given to some other society with similar objects. The membership rights are non transferable and it has perpetual succession not affected by the changes in its membership or employees. Along with having the flexibility to undertake a wide range of activities, a society also has a more democratic set up with membership and an elected body to mange it. The original members can continue to remain in control as long as they are elected to the managing committee. The society can exist beyond its original members and there is a possibility of a complete renewal of members and objects can be modified easily.

Permanent account number

If his total income or the total income of any other person in respect of which he is assessable under this Act during any previous year exceeded the maximum amount which is not chargeable to income tax; or
Carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed five lakh rupees in any previous year; or
Who is required to furnish a return of income under sub-section (4A) of section 139
Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department, India.

It is mandatory to quote PAN on return of income, all correspondence with any income tax authority. From 1 January 2005 it will be mandatory to quote PAN on challans for any payments due to Income Tax Department.

It is also compulsory to quote PAN in all documents pertaining to financial transactions notified from time-to-time by the Central Board of Direct Taxes. Some such transactions are sale and purchase of immovable property or motor vehicle or payments in cash, of amounts exceeding Rs. 25,000/-to hotels and restaurants or in connection with travel to any foreign country. It is also mandatory to mention PAN for obtaining a telephone or cellular telephone connection. Likewise, PAN has to be mentioned for making a time deposit exceeding Rs. 50,000/- with a Bank or Post Office or depositing cash of Rs. 50,000/- or more in a Bank.

Section 12A

The provisions of Section 11 & 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:-

the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later and such trust or institution is registered under section 12AA:

Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of section 11 and section 12 shall apply in relation to the income of such trust or institution, -

  1. from the date of the creation of the trust or the establishment of the institution if the Commissioner is, for reasons to be recorded in writing, satisfied that the person in receipt of the income was prevented from making the application before the expiry of the period aforesaid for sufficient reasons;
  1. from the 1st day of the financial year in which the application is made, if the Commissioner is not so satisfied ;

where the total income of the trust or institution as computed under this Act without giving effect to the provisions of section 11 and section 12 exceeds fifty thousand rupees in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the person in receipt of the income furnishes along with the return of income for the relevant assessment year the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed.

80 G Exemption of Income Tax

A donor (whether an individual, association, company, etc.) is entitled to a deduction (in computing his total income) if he makes a donation to a nonprofit organization enjoying exemption under section 80G of the Income Tax Act. The amount donated, however, should not exceed 10% of the donor’s gross total income as reduced by the deductions (other than the deduction under section 80G) for the purpose of rebate. If the donation is in excess of 10% of the donor’s gross total income, the amount in excess of 10% cannot be considered for deduction under this section.

Donations in kind (such as computers, medical equipment, vehicles, etc.) are not eligible for deduction under section 80G. The donation must be a certain sum of money.

FCRA – Foreign Country Regulatory Act

Under FCRA, an organization registered in India, having a definite cultural, economic, educational, religious or social programme is entitled to apply for registration. An organization can apply for FCRA registration even when it has foreigners as its member/board members. The only issue relevant in this regard is that FCRA authorities may exercise greater vigil and caution in processing such application. But as a matter of internal practice FCRA is not granting registration to organization with foreigners on board. Such registrations are given only in exceptional circumstances, very few instances are available.

35 AC exemption

35AC is Income Tax number for a Particular exclusive Project, Those who are all going to sponsor for the Project, they will get 100% Tax exception. So normally this 35AC is very Demand full among the Ngo’s.
On behalf of your Organization, HelpNgo will prepare the Project Proposal not exceeding a Net Budget of 15,00,00,000/- (Rupees Fifteen Crores) for 35AC and submit to the Government of India and get the acknowledgement. To prepare the Project Proposal we have to spend lot of time and involve more. We have to complete the Project Proposal within the stipulated deadline of the Application. So we need 100% co-operation to prepare the Project Proposal.

35 AC Exemptions (1&2)

(i)100% One hundred per cent deduction is allowed to donors for contribution(s) made to organizations approved under section 35(1)
(ii) (such as scientific research institutes or a university, college, or other institution) specifically for “scientific research” and under section 35(1)
(iii) specifically for “research in social science or statistical research.”

35 AC Exemptions (1&3)

Donors giving under this section can claim up to 125% deductions; donations can be 100% of the taxable income, but donations must be made to projects approved under section 35(1)(iii). Only organizations undertaking research in social sciences or statistical research can be approved. NPO (Non-Profitable Organization) should apply in form 3CF and send it to the Central Board of Direct Taxes through CIT. The approval is not given for more than 3 years at a time. It can be renewed. The NGO needs to maintain separate accounts for the money so received. This does not mean separate cash or bank account but only a separate ledger. An Annual Return also needs to be filed. This deduction will be withdrawn in 2006.

35 AC Exemptions (CCB)

Where donation is made to an association or institution, which has as its object the undertaking of any programme of conservation of natural resources or a forestation, to be used for carrying out any programme of conservation of natural resources or a forestation approved by the prescribed authority; or to such fund for a forestation as may be notified by the Central Government, then the donor shall be allowed a deduction of the amount of such 40 expenditure incurred. The prescribed authority (Secretary, Department of Environment, Govt. of India, New Delhi) shall not grant such approval for more than three years at a time. Under the Indian Income Tax law, it is mandatory for organizations to retain accounting records for 8 years from the end of the assessment year.

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