NGOs Receiving Corporate Donations
A Delhi-based NGO (Regd. as Trust) working in Health & Family Welfare that receives a donation of ₹5 crore from a single corporate must ensure compliance with various regulatory requirements. Below are the necessary documents, registrations, certifications, responsibilities, and compliance obligations:
1. Registration & Certification Requirements
The NGO must have the following key registrations and certifications:
✅ Registered as a Trust under the Indian Trusts Act, 1882 (if applicable)
✅ PAN & TAN Registration for tax compliance
✅ 12A Registration (if applicable) under the Income Tax Act – for exemption from income tax on the NGO's income
✅ 80G Registration (if applicable) under the Income Tax Act – to allow donors to claim tax deductions
✅ CSR Registration with MCA (Form CSR-1 filed with the Ministry of Corporate Affairs) – since the donation is from a corporate under CSR
✅ FCRA Registration (if foreign funds are involved) – Foreign Contribution Regulation Act, 2010
2. Documents Required for Donation Compliance
The NGO must prepare and maintain the following documents:
📌 Donation Receipt: Issued to the corporate donor mentioning the amount, purpose, and NGO details
📌 Utilization Certificate (UC): Issued by a Chartered Accountant (CA) confirming fund utilization
📌 Donation Agreement/MoU: Signed between the NGO and the corporate donor detailing fund utilization and compliance
📌 Board Resolution: Trust’s governing body approval for accepting the donation
📌 Annual Reports & Financial Statements: Maintained as per accounting norms
📌 Project Proposal & Fund Utilization Plan: Explaining how the ₹5 crore donation will be spent on Health & Family Welfare activities
3. Government Compliance & Responsibilities
✔ Income Tax Compliance:
- Maintain proper records for income tax assessment and audit
- File ITR-7 for NGOs/trusts under Section 139(4A) of the Income Tax Act
- Ensure compliance with Section 12A & 80G conditions
✔ CSR Compliance (Corporate Social Responsibility):
- Submit CSR Utilization Report to the corporate donor
- Ensure that spending aligns with Schedule VII of the Companies Act, 2013 (which includes Health & Family Welfare)
✔ Audit Requirements:
- If annual receipts exceed ₹2.5 crore, NGO must get its accounts audited
- A qualified Chartered Accountant (CA) must certify fund utilization
✔ GST Compliance:
- If the NGO provides goods/services for consideration, it may need GST registration
- Generally, pure grants/donations without service obligations are not subject to GST
✔ Reporting to NITI Aayog DARPAN Portal (if registered):
- If registered on NITI Aayog DARPAN, periodic reports on fund usage may be required
✔ FCRA Compliance (if applicable):
- If any part of the donation is from a foreign corporate, the NGO must comply with FCRA rules
4. Additional Best Practices
✅ Maintain transparency & accountability – Publish annual reports, donor reports, and audits
✅ Ensure donor expectations & CSR reporting – Keep the corporate donor updated on fund usage
✅ Periodic monitoring & evaluation – Use funds for intended purposes and track impact
Notes:
To legally and ethically receive and utilize a ₹5 crore donation from a corporate, Trust-64 must ensure:
- Proper tax registration (12A, 80G, PAN, TAN)
- CSR & Income Tax compliance
- Proper documentation (receipts, MoU, fund utilization reports, audit reports, etc.)
- Timely filing of returns & certifications
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