35AC Registration- A Fund raising tool by NGO’s

35AC Registration- A Fund
Raising tool by NGO’s in India
www.equicorplegal.com

Don’t just donate, donate right…..
 As a human nature, everyone wants to help or to
give for charitable cause, however, how can a
donor/s cross check or investigate the money
which they have given is been use for the same
cause or not?
 Who is going to monitor NGOs or how can
contribution be monitored towards the larger
good of the society or the cause?
 This situation has also created problems for
genuine charitable organizations, who are
actually working for the upliftment and
development of society, as people start
distrusting them also and treating them as fraud.
 Section 35 AC under Income Tax Act, 1961
answer all such questions. Section 35AC
registration can be used as an effective tool of
fund raising by NGO’s. It also beneficial to
donor as they receive 100% rebate of income
tax on the donated amount which makes a win-win
situation for both.

Introduction
 Section 35 AC of the Income Tax Act,
1961, is one of the key provision which
is relevant for raising funds and
resources for NGO’s if understood and
used effectively.
 The objective of Section 35 AC is to
encourage business organizations to
contribute more in social and economic
welfare and upliftment of general public.
With the increased emphasis on the
corporate social responsibility in the
corporate sector and ostentatious display
of charity by people like Bill Gates and
Warren Buffet, the contribution in the
monetary term by the corporate sector in
India towards socially relevant project
cannot be undermined.
 NGO’s involved in eligible projects
notified by the Central Government for
promoting the social and economic
welfare can raise resources for eligible
project from corporate sector and fulfil
their objective of development.
 Corporates simultaneously can fulfil
their corporate social responsibility
aspect of the business by contributing
towards the eligible projects and gain by
availing deduction under Section 35 AC.
Thus Section 35 AC can be used as an
effective tool of fund raising by the
NGO’s. It can also lead to a mutually
beneficial relationship between NGOs
and the Corporate Sector.

SECTION 35AC
 Section 35 AC provides that where a person or company incurs any
expenditure by way of payments of any sum to :
 A public sector company or;
 A local authority or;
 To an association or institution (NGOs) approved by the National Committee
 For carrying out any eligible project or scheme for promoting the social
and economic welfare of the public as the Central Government may
specify, then the amount so paid shall be allowed as deduction from the
business income of the assessee/contributor of such amount. In view of
NGO’s, the approved association or institution by National Committee
can raise funds for their approved from the eligible persons and donors
can avail the benefits of tax deductions

Persons (Donors) eligible to
Contribute under Section 35AC
 An individual;
 A Hindu Undivided Family;
 A Company;
 A Firm;
 An Association of persons or Body of Individuals, whether
incorporated or not;
 A Local authority;
 Every artificial juridical person not falling within any of the
preceding sub-clauses.

Approval of a Project or Scheme
by the National Committee
 An application has to be made to National Committee which should contain the
following particulars and be accompanied with relevant documents:
 Title of project or scheme, date of commencement, duration and likely date
of completion;
 Estimated cost of project or scheme duly supported by a copy of the
resolution of the Managing Committee of the applicant;
 Classes of persons who are likely to be benefited from the project or
scheme;
 Affirmation that no benefit from the project or scheme, other than
remuneration or honorarium for whole time or part-time work done or for
reimbursement of actual expenses related to the project will accrue to the
persons managing the affairs of the association or institution

Eligible Projects/Schemes
includes
 Family Welfare and immunization
 Tree plantation
 Social Forestry
 Development of Irrigation Resources
 Rural Sanitation - Construction of low
cost latrines
 Medical camps in rural areas
 Rural Health Programs
 Land development and recovering of
waste land with special concern on
ecological improvement
 Soil and water conservation including
harvesting of run off water
 Non formal education and literacy,
especially for children and women
 Rural and non farm activities
 Leprosy eradication
 Creation of employment opportunities for
urban and rural population living below the
poverty line
 Supportive services for women to engage in
productive work (Children care of working
women)
 Promotion of sports
 Construction of dwelling units for the
economically weaker sections
 Construction of school building for children
belonging to the economically weaker
sections of the society
 Establishment and running of non-conventional
and renewable sources of
energy systems
 Any other program for uplift of the rural poor
or the urban slum dwellers.

35 AC Registration Approval Process

Documents requisite for 35 AC
registration
i. Bye Laws of NGO
ii. Copy of Registration Certificate;
iii. Copy of resolution with date & seal of the
NGO, passed by the Board to undertake the
work under S.35 AC of the IT Act;
iv. A brief note on Proposed Project;
v. Brief note on past activities & credentials of
Management with details of experience in
activities similar to the object of proposed
project;
vi. Information regarding availability of
land/infrastructure to execute the project
/land documents to be enclosed;
vii. Expenditure incurred as on date on the
proposed project;
viii. Blue prints along with professional cost
estimates in support of construction
activities;
ix. Income criteria for selection of
beneficiaries/services to poor/weaker
section of the society;
x. Information regarding recognition of
school/training etc. from the concerned
education/technical board;
xi. Details of similar activities undertaken by
NGO & the
accomplishments/achievements etc.;
xii. Annual Reports & Audited Balance
Sheets for last 3 financial years;
xiii. Activity Reports of last 3 years;
xiv. Approval under Section 12 A & 80G of IT
Act;
xv. Approval under FCRA, if any

Consult the Experts-ECA
 Complete assistance for making the project report,
necessary filings, applications etc. for obtaining 35AC
registration
 Follow up support at various points in time during and
after the pendency of the application so as to ensure
that any additional documents/records requested by
National Committee is submitted in a systematic and
timely manner.
 To know the further details about 35 AC registration
and raising funds by NGOs and other aspects, contact
us at admin@equicorplegal.com

35AC Registration- A Fund raising tool by NGO’s

35AC Registration- A Fund raising tool by NGO’s

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