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Running a Non-Governmental Organization (NGO) involves not just social work but also ensuring legal compliance. Annual compliance for NGO Delhi ensures that your organization operates within legal boundaries, maintains its credibility, and continues to serve the public interest. In this guide, we will explore the critical components of annual compliance, required documents, and the process NGOs in Delhi must follow. PayMy Tax offers expert services to help NGOs meet these requirements efficiently.
Annual compliance for NGOs in Delhi is crucial for maintaining legal standing. Failure to comply may lead to penalties, loss of tax exemptions, and even cancellation of registration. The main components of annual compliance for NGOs include filing income tax returns, maintaining financial statements, and reporting donations and activities to the government.
Here are the top reasons why annual compliance for NGO in Delhi is essential:
Several types of annual compliance for NGO Delhi must be met depending on the organization’s activities and sources of funding. Let’s look at some of the key compliance requirements:
Filing Income Tax Returns is a mandatory annual compliance for NGO in Delhi. NGOs that qualify for tax exemptions under Section 12A or 80G of the Income Tax Act must submit their ITR before the due date.
Annual financial statements, audited by a certified accountant, are required. These statements ensure transparency and accountability in the organization’s financial management.
The NGO must prepare and submit an annual report detailing its activities, impact, and financial status. The report needs to be filed with the Registrar of Societies or the Charity Commissioner, as per the Societies Registration Act, 1860.
NGOs receiving foreign funding must comply with the Foreign Contribution Regulation Act (FCRA). This includes submitting an annual return detailing all foreign contributions received and how the funds were utilized.
If applicable, NGOs must comply with Goods and Services Tax (GST) rules. Even though many NGOs are exempt from GST on donations, they may still need to file GST returns if they offer services.
Maintaining proper books of accounts is essential for every NGO. This includes details of donations, grants, expenses, and any other sources of income or expenses.
To simplify the process, here is a step-by-step guide to ensure that your NGO remains compliant throughout the year:
Ensure that the NGO’s registration is up to date with the Registrar of Societies or the Charity Commissioner. Any changes in trustees, address, or activities should be reported.
For the preparation and audit of financial statements, hire a certified chartered accountant. They will help ensure that your financial records comply with legal requirements.
Your NGO must file an Income Tax Return (ITR) before the due date. If your NGO is exempt under Section 12A, the due date will be different from that of a regular taxpayer. Work closely with an accountant to ensure accurate filing.
If your NGO receives foreign contributions, submit your FCRA returns on time. FCRA returns must be filed online, along with a detailed report of all foreign funds received and utilized.
Your NGO’s annual report should include all the activities, financial summaries, and impact stories from the previous year. This report helps to keep your organization transparent and accountable.
If your NGO is involved in taxable activities, ensure to file GST returns in compliance with the law. Keep your GST registration up to date to avoid penalties.
Failure to comply with the annual compliance for NGO Delhi can result in several penalties, including:
PayMy Tax offers comprehensive services to ensure NGOs remain compliant with all legal requirements in Delhi. With our team of experienced professionals, we can assist in:
Our specialized services are tailored for NGOs, ensuring that you can focus on your mission while we handle your compliance needs. With PayMy Tax, you can avoid the hassle of non-compliance and focus on your core activities.
Annual compliance for NGO Delhi is not only a legal requirement but also essential for maintaining the credibility and smooth functioning of your organization. From filing income tax returns to preparing FCRA reports, there are several elements that NGOs need to stay compliant with. Non-compliance can result in fines, penalties, and even the loss of your registration.
PayMy Tax provides a complete solution for NGOs looking to fulfill their annual compliance obligations in Delhi. We help you manage everything from financial audits to tax filings, so your NGO can operate efficiently and stay focused on its goals.
PayMyTax Consultancy Pvt. Ltd. (PCPL) is a reputed company in New Delhi, India, which provides comprehensive services and solutions in the field of accounting, taxation, labour laws, corporate compliance and business management. We serve Indian and global businesses varying from small, medium to large sized firms and companies. We also have expertise and vast experience in providing end to end business solutions.