35AC Registration refers to Section 35AC of the Income Tax Act, 1961 in India. Under this section, certain organizations and projects engaged in specified activities for the welfare of the public can receive tax benefits for their donors. The tax benefits are in the form of deductions that the donors can claim on their taxable income.
The applicability of 35AC registration in India is relevant to organizations that are engaged in specified activities for the welfare of the public. These activities must be eligible for tax benefits under Section 35AC of the Income Tax Act, 1961. The following points provide an overview of the applicability:
- Eligible Organizations: Non-profit organizations, trusts, societies, and companies (both private and public) can apply for 35AC registration if they meet the prescribed criteria.
- Specified Activities: The organization must be involved in activities that are considered eligible by the government for 35AC benefits. These activities typically focus on sectors such as education, healthcare, sanitation, conservation of natural resources, and other areas of social welfare.
- Project-based Approach: The registration under 35AC is project-specific. It means that the organization should have a particular project or scheme that is eligible for tax benefits. The project should align with the objectives specified by the government.
- Compliance: Organizations seeking 35AC registration need to comply with the provisions mentioned in Section 35AC of the Income Tax Act. This includes maintaining proper accounts, submitting financial statements, and fulfilling any other requirements specified by the authorities.
- Approval and Validity: The National Committee for Promotion of Social and Economic Welfare (NCPSEW) evaluates the applications for 35AC registration. If approved, the registration is typically valid for a specified period, and the organization may need to renew it.
- Donor Benefits: Once registered, the organization can receive donations from individuals and businesses. The donors can claim deductions under Section 80GGA of the Income Tax Act for the amount donated to the registered organization.
Eligibility of 35AC Registration under income tax act
The eligibility criteria for 35AC registration in India include the following factors:
- Nature of Organization: Non-profit organizations, trusts, societies, and companies (both private and public) are eligible to apply for 35AC registration.
- Approved Activities: The organization must be engaged in activities that are considered eligible for tax benefits under Section 35AC. These activities typically focus on sectors such as education, healthcare, sanitation, conservation of natural resources, and other areas of social welfare. The specific activities eligible for registration are determined by the government.
- Project-based Approach: The registration under 35AC is project-specific. The organization should have a specific project or scheme that aligns with the objectives specified by the government for tax benefits. The project should be designed to benefit the public and fall within the approved sectors.
- Compliance: The organization must comply with the provisions of Section 35AC of the Income Tax Act. This includes maintaining proper accounts, submitting annual reports, and fulfilling any other requirements specified by the authorities.
- Approval by NCPSEW: The application for 35AC registration needs to be submitted to the National Committee for Promotion of Social and Economic Welfare (NCPSEW). The committee evaluates the application based on the eligibility criteria and compliance with the provisions of Section 35AC. If approved, the organization is granted registration.
Process of 35AC Registration
The process of 35AC registration involves several steps and procedures. Here is a general overview of the registration process:
- Eligibility Check: Ensure that your organization and the project you wish to register meet the eligibility criteria specified by the government under Section 35AC. The activities should fall within the sectors approved for tax benefits, such as education, healthcare, sanitation, conservation, etc.
- Application Preparation: Prepare the application for 35AC registration. Include details about your organization, its objectives, activities, and the specific project for which you are seeking registration. Gather all the required documents, such as project reports, audited financial statements, and other relevant paperwork.
- National Committee Application: Submit the application to the National Committee for Promotion of Social and Economic Welfare (NCPSEW), which is responsible for processing 35AC registrations. Ensure that the application is complete and includes all the necessary supporting documents.
- Application Review: The NCPSEW will review your application and assess its compliance with the provisions of Section 35AC. They may conduct site visits or inspections to verify the information provided. If any additional information or clarification is required, you may be asked to provide it.
- Approval and Registration: If the NCPSEW is satisfied with your application, they will grant registration under Section 35AC. You will receive an approval letter specifying the validity period of the registration, which is typically a few years. Ensure that you carefully review the terms and conditions mentioned in the approval letter.
- Renewal: Once the registration period nears expiration, you will need to apply for renewal to continue availing the benefits under 35AC. The renewal process may involve submitting updated documents and information to demonstrate ongoing compliance with the regulations.
- Publicizing the Registration: After receiving 35AC registration, it is important to publicize the same to potential donors and stakeholders. This can be done through various means, such as mentioning the registration details on your organization’s website, communication materials, and fundraising campaigns.
Documents Required for 35AC Registration
The documents required for 35AC registration in India may vary depending on the specific requirements and regulations. However, here is a list of commonly required documents:
- Application Form: The prescribed application form for 35AC registration needs to be filled out accurately and completely.
- Memorandum and Articles of Association: If your organization is a company, you will need to provide a copy of the Memorandum and Articles of Association.
- Trust Deed or Society Registration Certificate: If your organization is a trust or society, you will need to submit a copy of the Trust Deed or the Society Registration Certificate, as applicable.
- PAN Card: A copy of the Permanent Account Number (PAN) card of your organization should be included.
- Audited Financial Statements: Submit the audited financial statements of your organization for the previous three years. This includes the balance sheet, income statement, and other relevant financial documents.
- Project Reports: Prepare detailed project reports for the specific project you are seeking registration for. The report should outline the objectives, activities, budget, and expected outcomes of the project.
- Annual Reports: Provide the annual reports of your organization for the previous three years, including information about the activities undertaken, funds utilized, and impact achieved.
- Income Tax Returns: Submit the income tax returns filed by your organization for the previous three years.
- 80G Certificate: If your organization has been granted 80G certification for tax benefits to donors, include a copy of the certificate.
- Board Resolution: A board resolution authorizing the application for 35AC registration should be included.
- Bank Account Details: Provide the details of your organization’s bank account, including the account number, bank name, and branch.
- Any other Supporting Documents: Depending on the nature of your organization and the project, you may be required to submit additional supporting documents, such as project-related licenses, permits, or approvals.
Validity of Section 35AC Registration under Income Tax Act, 1961
Section 35AC of the Income Tax Act, 1961, provides for the registration of certain projects or schemes carried out by nonprofit organizations (NPOs) in India. This registration allows eligible organizations to avail themselves of tax benefits.
The registration under Section 35AC of the Income Tax Act is valid for a specified period of time, typically three years. During this period, NPOs could receive tax benefits in the form of deductions from their taxable income. The tax benefits were available to both corporate and individual taxpayers who made donations to the registered projects or schemes.
To be eligible for registration under Section 35AC, an organization had to meet certain criteria and submit an application to the National Committee for Promotion of Social and Economic Welfare (NCPSEW), which was responsible for granting the registration. The NCPSEW evaluated the projects or schemes based on their social and economic welfare objectives and their potential impact on society.
FAQ's
The purpose of 35AC registration is to provide tax benefits to organizations engaged in specified activities for the welfare of the public. It encourages donors to contribute to these organizations by allowing them to claim deductions on their taxable income.
Eligible activities for 35AC registration include sectors such as education, healthcare, sanitation, conservation of natural resources, and other areas of social welfare. The government specifies the eligible activities for tax benefits.
Non-profit organizations, trusts, societies, and companies (both private and public) can apply for 35AC registration if they meet the eligibility criteria and are engaged in activities eligible for tax benefits.
The validity period of 35AC registration is typically for a specified number of years. The specific validity period is mentioned in the approval letter issued by the National Committee for Promotion of Social and Economic Welfare (NCPSEW).
Yes, 35AC registration can be renewed upon expiration. To continue availing the benefits, the organization needs to apply for renewal, provide updated documents, and demonstrate ongoing compliance with the regulations.
Yes, organizations with 35AC registration are required to maintain proper accounts and submit annual reports, including audited financial statements, project reports, and income tax returns. Compliance with reporting requirements is important to maintain the registration.
Yes, organizations with 35AC registration can accept foreign donations subject to compliance with the Foreign Contribution (Regulation) Act, 2010 (FCRA) and other applicable regulations.
Yes, donors can claim deductions on their taxable income under Section 80GGA of the Income Tax Act for donations made to organizations registered under 35AC.
Yes, an organization can apply for both 35AC and 80G registration. However, the eligibility criteria and requirements for each registration are different, and separate applications need to be submitted.
For more information or guidance on 35AC registration, you can consult with a qualified professional, seek assistance from the Income Tax Department, or refer to the official website of the National Committee for Promotion of Social and Economic Welfare (NCPSEW).
