Introduction to 12AA Renewal

Registration under Section 12AA (now transitioned to 12AB) of the Income Tax Act, 1961 is mandatory for NGOs, trusts, and societies to claim income tax exemption on their surplus income.

As per amended provisions, all existing 12AA registrations must be renewed within prescribed timelines to continue availing tax exemption benefits.

This Saving Mantra guide explains the step-by-step process for 12AA (12AB) renewal in India, ensuring full compliance and uninterrupted tax benefits.

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What Is 12AA / 12AB Renewal?

12AA renewal refers to the revalidation of:

• Existing 12AA registration
• Provisional 12AB registration

Upon renewal:

• A new 12AB certificate is issued
• Validity is generally 5 years
• Tax exemption under Sections 11 & 12 continues

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Who Needs to Apply for 12AA Renewal?

12AA / 12AB renewal is required for:

• Charitable Trusts
• Registered Societies
• Section 8 Companies
• NGOs already holding 12AA or provisional 12AB registration

Failure to renew may lead to loss of income tax exemption.

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Benefits of 12AA Renewal

• Continuation of income tax exemption
• Eligibility for 80G approval
• Increased donor and CSR credibility
• Legal compliance with Income Tax Department

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Eligibility Criteria for 12AA Renewal

To be eligible, the NGO must:

• Be legally registered as Trust / Society / Section 8 Company
• Carry out genuine charitable activities
• Maintain proper books of accounts
• File income tax returns regularly
• Use income strictly for charitable purposes

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Step-by-Step Process for 12AA Renewal in India

Step 1: Review Existing 12AA / 12AB Status

Check:

• Current registration type (12AA or provisional 12AB)
• Validity period
• Compliance history

This determines the applicable renewal timeline.

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Step 2: Prepare Required Documents

Commonly required documents include:

• Existing 12AA / 12AB certificate
• Registration certificate of NGO
• Trust deed / MOA / Bye-laws
• PAN of NGO
• Activity report
• Audited financial statements
• List of trustees / directors
• Bank account details

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Step 3: File Online Application (Form 10AB)

• Login to Income Tax e-filing portal
• Select Form 10AB for renewal
• Fill organizational and activity details
• Upload supporting documents
• Submit using DSC or EVC

Form 10AB is mandatory for all 12AA renewals.

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Step 4: Verification & Scrutiny

The Income Tax Department may:

• Seek clarifications
• Ask for additional documents
• Conduct inquiries to verify genuineness of activities

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Step 5: Grant of 12AB Registration

Upon satisfaction:

• New 12AB registration order is issued
• Validity: 5 years
• NGO continues to enjoy tax exemption benefits

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Time Limit for 12AA Renewal

• Renewal application must be filed at least 6 months before expiry
• Processing time: 1 to 3 months, depending on scrutiny

Timely filing avoids lapse of exemption.

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Post-Renewal Compliance Requirements

After renewal, NGOs must:

• File income tax returns on time
• Maintain proper books and audit reports
• File Form 10BD & issue Form 10BE (if 80G approved)
• Intimate changes in objects or management

Non-compliance can lead to cancellation of 12AB registration.

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Common Reasons for 12AA Renewal Rejection

• Non-genuine or inactive charitable activities
• Incomplete or incorrect documents
• Diversion of funds for non-charitable purposes
• Irregular tax filings
• Mismatch between objectives and activities

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How Saving Mantra Helps

Saving Mantra provides end-to-end 12AA / 12AB renewal services, including:

• Eligibility and compliance review
• Document preparation & verification
• Form 10AB filing
• Handling income tax queries
• Ongoing NGO compliance support

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Disclaimer

This article is for informational purposes only and does not constitute legal, tax, or professional advice. Tax laws and procedures are subject to change. Readers are advised to consult qualified professionals before filing 12AA/12AB renewal applications. Saving Mantra shall not be responsible for decisions taken based on this information.

Saving Mantra Blog: Step-by-Step Process for Repatriation of Funds under FEMA/LRS in India

Repatriation of funds from India refers to transferring money outside India by residents or non-residents under regulated frameworks such as FEMA (Foreign Exchange Management Act, 1999) and LRS (Liberalised Remittance Scheme). Whether it is income earned in India, sale proceeds of investments, or remittance for education or family maintenance, the Reserve Bank of India (RBI) and banks ensure proper documentation, tax compliance, and traceability.

This guide breaks down the complete step-by-step process covering RBI rules, bank procedure, documentation, and tax compliance.

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🏛 1. Understanding FEMA & LRS Framework

Before initiating repatriation, it is crucial to know which rules apply:

✔ FEMA (Foreign Exchange Management Act, 1999)

Controls foreign exchange transactions in India and governs:

• Inward remittances
• Outward remittances
• Repatriation of sale proceeds
• Repatriation by NRI/OCI investors
• Limits, documentation, and approvals

✔ LRS (Liberalised Remittance Scheme)

Allows resident individuals to remit up to USD 250,000 per financial year for:

• Education expenses
• Travel
• Family maintenance
• Gifts & donations
• Medical treatment
• Investment abroad

✔ Repatriation by NRIs/OCIs

NRIs/OCIs can repatriate from:

• NRE Accounts – Fully repatriable (principal + interest)
• FCNR(B) Accounts – Fully repatriable (principal + interest)
• NRO Accounts – Up to USD 1 million per FY post-tax

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📑 2. Documentation Required for Repatriation

Banks require compliance and proof of source of funds. Below are typical documents:

🗂 Commonly Required Documents

• PAN card
• Passport (for NRIs/OCIs)
• Visa/OCI card copy
• Bank account statements
• FEMA declaration
• Remitter’s self-declaration
• Purpose code selection

🗂 Specific Cases

(a) NRO to NRE / Overseas Transfer

• Form 15CA (online submission via Income Tax portal)
• Form 15CB (issued by Chartered Accountant)
• Proof of tax paid/TDS certificates
• Source of funds (e.g., rental income, sale proceeds, dividend)

(b) LRS Remittances

• LRS declaration form (A2 form)
• KYC documents
• Tax Collected at Source (TCS) confirmation (if applicable)

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🏦 3. Bank Procedure for Repatriation

Below is the standard step-by-step process followed by banks in India:

Step 1 — Contact Bank Branch or Authorized Dealer (AD Bank)

Repatriation can only occur through banks authorized by RBI to deal in forex.

Step 2 — Submission of Documents

Submit:

• Application form
• FEMA/LRS declaration
• 15CA/15CB (if required)
• Source of funds proof
• KYC documents

Step 3 — Verification by Bank

Bank verifies:

• Purpose code
• FEMA compliance
• Tax clearance
• Foreign exchange usage limit
• Beneficiary details abroad

Step 4 — Forex Conversion & Transfer

Bank converts INR to foreign currency (USD/EUR/GBP etc.) and sends funds via SWIFT to the beneficiary account.

Step 5 — Confirmation & Reporting

Bank issues confirmation reports for compliance and future reference, such as:

• SWIFT copy
• Remittance advice
• FIRC (Foreign Inward Remittance Certificate) or debit advice

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💼 4. Tax Compliance Before Repatriation

Most repatriations require income tax compliance to avoid misuse.

🔶 Form 15CA

An online declaration filed to the Income Tax Department for foreign remittances.

🔷 Form 15CB

A certificate issued by a Chartered Accountant confirming:

• Nature of remittance
• Applicable tax rate
• Taxability under DTAA (if applicable)
• TDS paid (if applicable)

⭐ When 15CA & 15CB Are Mandatory

Required when:
✔ Taxable nature of funds
✔ NRO repatriation beyond ₹5 lakh
✔ Specific foreign remittances under rule 37BB

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🌍 5. RBI Compliance & FEMA Reporting

Depending on purpose, banks apply correct Purpose Codes, such as:

• S1101 – Maintenance of close relatives
• S0301 – Education abroad
• S0501 – Gifts
• S1301 – Remittance by NRI from NRO

This ensures alignment with RBI’s foreign exchange monitoring system.

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📦 6. Types of Funds Allowed for Repatriation

Below funds can be repatriated depending on status:

✔ Resident Individuals (Under LRS)

• Maintenance for family abroad
• Education & travel expenses
• Investments in securities abroad
• Purchase of property abroad

✔ NRIs/OCIs

• Rent income
• Dividend
• Pension
• Sale of immovable property (post compliance)
• Sale of investments
• Current income (interest etc.)
• Inheritance receipts

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🚫 7. Repatriation Restrictions to Note

• TCS applicable under Section 206C(1G) for LRS if limits exceeded
• Restrictions on remitting lottery/illegal income
• Sale proceeds of agricultural property not repatriable in many cases
• FEMA approval required in specific real estate scenarios

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📌 8. Practical Tips for Smooth Processing

✔ Keep all tax proofs and TDS certificates
✔ Maintain trail of credit entry in NRO accounts
✔ Take CA assistance for 15CA/15CB
✔ Check double taxation relief under DTAA
✔ Apply before financial year end for LRS limit optimization
✔ Choose correct purpose code for compliance

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Conclusion

Repatriation of funds from India is a structured process involving RBI rules, FEMA compliance, tax clearance, and bank procedures. With proper documentation and professional support, the process is smooth, compliant, and efficient.

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Disclaimer

This article is for educational and informational purposes only and does not constitute legal, tax, or financial advice. FEMA rules, RBI regulations, limits, and tax laws may change over time. Always consult a qualified professional and verify latest rules before initiating any repatriation transaction.

📌 What Is a Lower Tax Deduction Certificate?

A Lower Tax Deduction Certificate (sometimes called a lower TDS certificate) is issued by the Income Tax Department when the estimated tax liability justifies a reduced rate of TDS or no TDS at source. It ensures the payer deducts tax at a lower rate than the default specified for non-residents.

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📋 Eligibility Criteria

Your company can apply if:
✅ It does not have a PE in India and the income in India is taxable.
✅ Estimated tax liability on Indian income is lower than the default TDS rate.
✅ PAN (Permanent Account Number) is available.
✅ You have supporting documents like past tax returns, income computations, and contractual details.

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📝 Documents You’ll Need

Prepare these before applying:

• Copy of PAN of the foreign entity
• Contract or agreement showing income from India
• Details of Tax Deductor’s TAN (Tax Deduction Account Number)
• Estimated income and tax liability computation
• Previous years’ income & tax returns (if available)

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💻 Step-by-Step Application Process

1. Login to TRACES Portal

Go to the Income Tax Department’s TRACES portal and log in using your PAN and credentials (register if new).

2. Find Form 13

Navigate to “e-File → Form 13 – Application for Lower/Nil Deduction Certificate.”

3. Input Company & Income Details

Complete Form 13:
✔ Foreign entity details (PAN, address)
✔ Deductor’s details (TAN, name)
✔ Estimated income from India
✔ Tax liability calculation
✔ TDS section under which tax would ordinarily be deducted

4. Upload Supporting Documents

Attach income proofs, contracts, computations, tax returns, and other evidence to justify a lower rate.

5. Verify & Submit

Verify with a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC) and submit.

6. Tracking & Assessment

You’ll get an acknowledgment. The jurisdictional Assessing Officer (AO) reviews the application and may ask for clarifications.

7. Issue of Certificate

If approved, the AO issues the certificate with the approved lower rate or nil rate and validity period, usually up to the end of the financial year.

8. Give Certificate to Deductor

Share the issued certificate with the payer in India so they can deduct TDS at the approved rate.

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⏱ Typical Timelines & Validity

• Processing usually takes 4–6 weeks but can vary.
• The certificate is generally valid until the end of the financial year or as mentioned on it.

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✅ Final Tips for Success

✔ Apply before the first payment in the year to avoid excess TDS.
✔ Submit complete and accurate documentation to minimize queries from the AO.
✔ Renew annually if you want continued benefit in subsequent years.

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⚠️ Disclaimer

This blog is for informational purposes only and doesn’t constitute legal or tax advice. Tax laws and procedures can change; always verify with the Income Tax Department and consult a qualified tax professional before applying.

Introduction to Objection Memo & Reply Filing

NGOs, Trusts, and Societies in India often receive notices, objections, or clarification letters from various authorities during registrations, renewals, audits, or assessments. Filing a timely and accurate Objection Memo or Reply is crucial to protect legal status and ensure smooth compliance.

Replies may be required before authorities such as the Income Tax Department, Charity Commissioner, Registrar of Societies, CSR authorities, or FCRA division.

This Saving Mantra guide explains the step-by-step process for filing objection memos and other replies for NGO/Trust/Society in India.

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What Is an Objection Memo or Reply?

An Objection Memo / Reply is a formal written response submitted against:

• Income Tax notices (12AB, 80G, scrutiny, audit)
• Change report objections
• Registration or renewal queries
• Compliance defects or document shortfalls
• FCRA or CSR clarifications

It justifies the NGO’s position with facts, documents, and legal references.

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When Is Filing an Objection or Reply Required?

Replies are required when:

• A notice or defect memo is issued
• Clarification or additional documents are sought
• Application is kept pending due to discrepancies
• Provisional approval is objected or questioned
• Assessment or inquiry proceedings are initiated

Missing deadlines may result in rejection, cancellation, or penalties.

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Step-by-Step Process for Filing Objection Memo & Replies

Step 1: Carefully Review the Notice

• Identify issuing authority
• Note reference number and date
• Understand objections, defects, or queries
• Check deadline for submission

Never respond without understanding the exact concern.

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Step 2: Identify Applicable Law & Authority

Determine whether the reply is under:

• Income Tax Act, 1961
• State Trust / Society laws
• FCRA regulations
• CSR guidelines

Each authority has a specific format and tone.

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Step 3: Collect Supporting Documents

Common documents include:

• Registration certificates
• Trust deed / MOA / Bye-laws
• Board resolutions
• Financial statements & audit reports
• Activity and project reports
• Bank statements
• Clarification affidavits

Documents must directly address the objection raised.

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Step 4: Draft the Objection Memo / Reply

A proper reply should include:

• Reference to notice number & date
• Point-wise response to each objection
• Legal explanation and factual clarity
• Supporting document index
• Declaration and authorized signature

Clarity and accuracy are critical.

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Step 5: Approval by Governing Body (If Required)

For major matters:

• Obtain trustee / board approval
• Pass a resolution authorizing submission
• Attach authorization letter

This strengthens the reply’s legal standing.

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Step 6: File Reply Through Prescribed Mode

Replies may be filed:

• Online via Income Tax or MCA portal
• Through email (as instructed)
• Physical submission to authority office

Always follow the mode specified in the notice.

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Step 7: Acknowledge & Track Status

• Save acknowledgement or submission proof
• Track response status online or offline
• Be prepared for hearings or further queries

Maintain records for future reference.

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Time Limit for Filing Objection Memo

• Usually 7 to 30 days from notice date
• Timelines vary by authority and nature of notice

Late submissions may lead to adverse orders.

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Common Reasons Objections Are Raised

• Incomplete documentation
• Mismatch in financial data
• Unclear charitable objectives
• Non-compliance with registration conditions
• Delayed filings or updates

Proactive compliance reduces objections.

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Best Practices for Effective Replies

• Respond point-wise, not generically
• Attach only relevant documents
• Avoid emotional or argumentative language
• Quote applicable legal provisions where needed
• Maintain professional formatting

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How Saving Mantra Helps NGOs

Saving Mantra provides expert objection and reply handling services, including:

• Notice analysis & compliance mapping
• Drafting professional objection memos
• Document collation & validation
• Online and offline submission
• Representation & follow-ups

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Disclaimer

This article is for informational purposes only and does not constitute legal, tax, or professional advice. Procedures and timelines vary based on authority and applicable laws. Readers are advised to consult qualified professionals before filing replies or objections. Saving Mantra shall not be liable for actions taken based on this content.

Introduction to Change Report Filing

A Change Report is a mandatory compliance requirement for NGOs, charitable trusts, and societies whenever there is any change in management, structure, address, objects, or governing body. Filing a timely change report ensures transparency and legal continuity of the organization.

Change reports are typically filed with the Charity Commissioner, Registrar of Societies, or other applicable authorities depending on the type of entity and state laws.

This Saving Mantra guide explains the step-by-step process for filing a Change Report for NGO/Trust/Society in India, covering applicability, documents, timelines, and best practices.

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What Is a Change Report?

A Change Report is a formal intimation submitted to the concerned authority to record any modification in:

• Trustees or managing committee members
• Office bearers (President, Secretary, Treasurer, etc.)
• Registered office address
• Objectives or activities
• Name of the NGO
• Bank signatories or internal governance structure

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Who Is Required to File a Change Report?

Change Report filing is mandatory for:

• Charitable Trusts
• Registered Societies
• Section 8 Companies (as applicable under MCA filings)
• NGOs registered under state charity laws

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When Is Change Report Filing Required?

A change report must be filed when there is:

• Appointment, resignation, or death of trustee/member
• Change in governing body composition
• Amendment in trust deed, MOA, or bye-laws
• Change in registered office address
• Merger or restructuring of NGO

Delay or non-filing may attract penalties or legal complications.

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Step-by-Step Process for Filing Change Report in India

Step 1: Identify the Nature of Change

Determine whether the change relates to:

• Management / trustees
• Address
• Objectives
• Structural amendments

Each type of change may require different documentation.

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Step 2: Conduct Governing Body Meeting

• Convene a Board of Trustees / Managing Committee meeting
• Pass a resolution approving the change
• Record minutes of the meeting

This resolution forms the legal basis for filing the change report.

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Step 3: Prepare Supporting Documents

Documents typically required include:

• Resolution and minutes of meeting
• Updated list of trustees/members
• Identity & address proof of new members
• Amended trust deed / MOA / bye-laws (if applicable)
• Affidavit or declaration
• Previous registration certificates

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Step 4: Draft and File the Change Report

• Prepare the change report in prescribed format
• File it with the Charity Commissioner / Registrar of Societies
• Attach all supporting documents
• Pay applicable government fees

Some states allow online filing, while others require physical submission.

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Step 5: Scrutiny by Authorities

• Authority reviews documents and resolutions
• May issue notice for clarification or objections
• Hearing may be conducted if required

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Step 6: Approval & Record Update

Once approved:

• Changes are recorded in official NGO records
• Updated entry is reflected in public register
• NGO can legally operate with updated details

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Time Limit for Filing Change Report

• Generally required within 30 to 90 days from the date of change
• Timelines may vary based on state-specific laws

Early filing helps avoid disputes and penalties.

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Compliance Linkages with Change Report

Change report filing supports:

• Validity of NGO governance
• Smooth income tax compliance under the Income Tax Act, 1961
• FCRA compliance (if applicable)
• Bank, donor, and CSR reporting

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Common Mistakes to Avoid

• Delayed filing of change report
• Missing board resolutions
• Incorrect or incomplete documentation
• Not updating related authorities (Income Tax, FCRA, banks)
• Ignoring state-specific rules

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How Saving Mantra Helps NGOs

Saving Mantra provides complete Change Report filing services, including:

• Identification of applicable changes
• Drafting resolutions and documents
• Filing with Charity Commissioner / Registrar
• Follow-ups and approvals
• Post-change compliance alignment

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Disclaimer

This article is for informational purposes only and does not constitute legal or professional advice. Change report procedures and timelines may vary by state and governing law. Readers are advised to consult qualified professionals before filing. Saving Mantra shall not be liable for actions taken based on this information.

Introduction to Annual Budget Filing for NGOs

Preparing and filing an Annual Budget is a critical compliance and governance requirement for every NGO, Trust, and Society in India. The annual budget acts as a financial roadmap, outlining expected income, planned expenses, and project-wise fund allocation for the upcoming financial year.

Proper budgeting ensures transparency, donor confidence, and smooth compliance under the Income Tax Act, 1961, CSR norms, FCRA (if applicable), and internal governance rules.

This Saving Mantra guide explains the step-by-step process for filing the annual budget for NGOs in India, suitable for charitable trusts, societies, and Section 8 companies.

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What Is an Annual Budget for NGO/Trust/Society?

An annual budget is a financial statement that estimates:

• Expected income (donations, grants, CSR, subscriptions)
• Program and project expenses
• Administrative and compliance costs
• Capital expenditure (assets, infrastructure)
• Reserve or surplus planning

It is usually approved by the Governing Body / Board of Trustees before the start of the financial year.

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Why Annual Budget Filing Is Important

• Ensures financial discipline and control
• Mandatory under trust deed, MOA, or bye-laws
• Required for donor funding and CSR grants
• Essential for FCRA and statutory compliance
• Helps in audit, reporting, and future planning

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Who Is Required to Prepare an Annual Budget?

Annual budget preparation is required for:

• Charitable Trusts
• Registered Societies
• Section 8 Companies
• NGOs receiving grants, CSR funds, or foreign contributions

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Step-by-Step Process for Filing Annual Budget in India

Step 1: Review Previous Year Financials

Analyze:

• Last year’s income and expenditure
• Budget vs actual variance
• Pending liabilities or commitments
• Project-wise fund utilization

This helps in realistic budget planning.

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Step 2: Estimate Expected Income

Prepare income projections from:

• Voluntary donations
• CSR contributions
• Government or private grants
• Foreign contributions (FCRA registered NGOs)
• Membership fees or subscriptions
• Interest or other income

Income estimation should be conservative and well-supported.

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Step 3: Plan Program & Project Expenses

Allocate funds for:

• Ongoing projects
• New proposed programs
• Beneficiary-related costs
• Monitoring and evaluation expenses

Each project should have a clear budget head.

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Step 4: Estimate Administrative Expenses

Include:

• Salaries and professional fees
• Office rent and utilities
• Compliance costs (audit, filing, consultancy)
• Technology, software, and communication costs

Administrative expenses should remain reasonable and justifiable.

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Step 5: Capital Expenditure Planning

Budget for:

• Purchase of equipment
• Office infrastructure
• Vehicles or fixed assets
• Long-term capacity building

Capital expenses should align with NGO objectives.

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Step 6: Prepare Budget Statement

Create a structured budget document showing:

• Income heads
• Expenditure heads
• Surplus or deficit projection
• Project-wise allocation

The budget should be prepared in standard accounting format.

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Step 7: Governing Body / Board Approval

• Present the budget to Trustees / Managing Committee
• Pass a formal Board Resolution
• Record approval in meeting minutes

Board approval is mandatory for legal validity.

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Step 8: Filing & Record Maintenance

Depending on structure and funding:

• Maintain budget in statutory records
• Submit to donors or CSR partners if required
• Upload or submit to government authorities (if applicable)
• Keep ready for audit and assessments

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Documents Required for Annual Budget Filing

• Previous year financial statements
• Activity and project reports
• Estimated income details
• Expense breakup and projections
• Governing body resolution
• Trust deed / MOA / Bye-laws

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Compliance Linkages with Annual Budget

Annual budget supports compliance with:

• Income Tax filings and audit
• CSR funding utilization
• FCRA reporting (where applicable)
• Internal control and governance norms

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Common Mistakes to Avoid

• Unrealistic income projections
• Mixing capital and revenue expenses
• No board approval
• Ignoring compliance-related costs
• Poor documentation and records

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How Saving Mantra Helps NGOs

Saving Mantra offers end-to-end NGO financial compliance support, including:

• Annual budget preparation
• Project-wise financial planning
• Board resolutions & documentation
• Alignment with tax, CSR & FCRA norms
• Audit and compliance advisory

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Disclaimer

This article is for informational purposes only and does not constitute legal, financial, or professional advice. Budgeting requirements may vary based on the NGO’s structure, funding, and applicable laws. Readers are advised to consult qualified professionals before implementation. Saving Mantra is not responsible for actions taken based on this information.

Introduction to 80G Registration

Section 80G of the Income Tax Act, 1961 allows donors to claim tax deductions for donations made to eligible charitable institutions. To offer this benefit, NGOs must obtain 80G registration from the Income Tax Department.

This Saving Mantra guide explains the step-by-step process for 80G registration in India, covering eligibility, documentation, timelines, and post-registration compliance.

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What is 80G Registration?

80G registration is an approval granted to:

• Charitable Trusts
• Registered Societies
• Section 8 Companies

Once approved, donors can claim 50% or 100% tax deduction (with or without qualifying limits), depending on the nature of the institution.

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Benefits of 80G Registration

For NGOs

• Increased donor confidence
• Higher fund inflow
• Legal recognition under Income Tax Act

For Donors

• Tax deduction under Section 80G
• Proof of legitimate charitable contribution

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Eligibility Criteria for 80G Registration

An organization must:

• Be registered as Trust, Society, or Section 8 Company
• Have charitable objectives only
• Be registered under Section 12AB
• Maintain proper books of accounts
• Not use funds for religious or political purposes
• Not distribute profits to members

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Step-by-Step Process for 80G Registration in India

Step 1: NGO Legal Registration

Ensure your organization is legally registered under:

• Indian Trusts Act
• Societies Registration Act
• Companies Act, 2013 (Section 8)

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Step 2: Obtain 12AB Registration

80G approval is granted only to organizations holding valid 12AB registration from the Income Tax Department.

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Step 3: Prepare Required Documents

The following documents are required:

• NGO registration certificate
• Trust deed / MOA & AOA
• PAN of NGO
• 12AB registration certificate
• Audited financial statements (if available)
• Activity report
• Details of trustees/directors
• Bank account details

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Step 4: Online Application Filing

• Log in to the Income Tax e-filing portal
• File Form 10AB (or 10A for provisional approval)
• Upload documents and declarations
• Submit application using DSC or EVC

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Step 5: Verification & Scrutiny

• Income Tax Department may ask for clarifications
• Additional documents may be requested
• Physical inspection may be conducted in some cases

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Step 6: Grant of 80G Certificate

Once approved:

• 80G certificate is issued digitally
• Validity: 5 years (provisional approval for 3 years)
• Unique approval number allotted

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Time Required for 80G Registration

• Average processing time: 30 to 90 days
• Depends on documentation and departmental review

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Post 80G Registration Compliance

After approval, NGOs must:

• Issue donation receipts with mandatory details
• File Statement of Donations (Form 10BD)
• Generate Form 10BE for donors
• Maintain proper accounts
• Renew 80G registration before expiry

Failure to comply can lead to cancellation of 80G approval.

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Common Reasons for 80G Rejection

• Non-charitable or ambiguous objectives
• Missing 12AB registration
• Incomplete documentation
• Non-compliance with tax rules
• Misuse of funds

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How Saving Mantra Helps

Saving Mantra provides end-to-end 80G registration services, including:

• Eligibility analysis
• Documentation support
• Online filing & follow-ups
• Compliance & renewal assistance

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Disclaimer

This article is intended for informational purposes only and does not constitute legal or tax advice. Provisions of the Income Tax Act and related rules are subject to change. Readers should consult qualified professionals before applying. Saving Mantra shall not be responsible for decisions taken based on this content.

Introduction to Section 35 Approval

Section 35 of the Income Tax Act, 1961 provides tax incentives to donors who contribute to approved scientific research institutions and universities. Obtaining Section 35(1)(ii) or Section 35(1)(iii) approval enables institutions to attract donations by offering 100% tax deduction benefits to donors.

This Saving Mantra guide explains the complete step-by-step process for obtaining Section 35 approval in India, designed for trusts, societies, Section 8 companies, and research institutions.

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What is Section 35(1)(ii) Approval?

Section 35(1)(ii) approval is granted to:

• Scientific research associations
• Institutions engaged in scientific research (excluding social science)

Donor Benefit:
100% deduction of donation amount from taxable income.

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What is Section 35(1)(iii) Approval?

Section 35(1)(iii) approval applies to:

• Universities
• Colleges
• Institutions conducting research in social sciences or statistical research

Donor Benefit:
100% deduction of donation amount from taxable income.

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Key Difference: 35(1)(ii) vs 35(1)(iii)

Particulars	Section 35(1)(ii)	Section 35(1)(iii)
Nature of Research	Scientific (Non-social)	Social Science / Statistical
Eligible Entities	Research Associations	Universities / Colleges
Approving Authority	Central Board of Direct Taxes	Central Board of Direct Taxes
Donor Deduction	100%	100%

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Eligibility Criteria for Section 35 Approval

To qualify, the applicant institution must:

• Be registered as Trust, Society, or Section 8 Company
• Be engaged in genuine research activities
• Maintain proper books of accounts
• Have non-profit objectives
• Not distribute profits or dividends
• Be compliant with income tax regulations

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Step-by-Step Process for Section 35(1)(ii) & 35(1)(iii) Approval

Step 1: Legal Registration of Institution

Ensure your organization is legally registered under:

• Indian Trusts Act
• Societies Registration Act
• Companies Act, 2013 (Section 8)

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Step 2: Obtain Income Tax Registration

Mandatory registrations include:

• PAN of the institution
• Registration under Section 12AB
• Valid 80G registration (recommended)

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Step 3: Prepare Research Infrastructure

The institution must demonstrate:

• Dedicated research facilities
• Qualified researchers and staff
• Ongoing or completed research projects
• Published research papers (if available)

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Step 4: Documentation Preparation

Prepare the following documents:

• Registration certificate and governing documents
• PAN and 12AB certificate
• Audited financials (last 3 years)
• Activity and research reports
• List of donors (if any)
• Details of governing body members
• Affidavit for non-commercial use of funds

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Step 5: Online Application Filing

• File application electronically with the Income Tax Department
• Select applicable section: 35(1)(ii) or 35(1)(iii)
• Upload documents and declarations
• Submit application digitally

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Step 6: Scrutiny & Inspection

• Authorities may seek clarification or additional documents
• Physical inspection of premises may be conducted
• Evaluation of research authenticity and infrastructure

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Step 7: Grant of Approval

Upon satisfaction:

• Approval notification issued
• Institution listed on Income Tax approved institutions list
• Donors become eligible for deduction benefits

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Time Required for Section 35 Approval

• Average processing time: 3 to 6 months
• May extend depending on scrutiny and verification

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Post-Approval Compliance Requirements

After receiving approval, the institution must:

• Utilize donations strictly for research purposes
• Maintain separate books of accounts
• File annual returns and audit reports
• Submit research progress reports as required
• Avoid diversion of funds for non-research activities

Non-compliance can lead to withdrawal of Section 35 approval.

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Common Reasons for Rejection

• Inadequate research activity evidence
• Poor financial documentation
• Commercial or profit-oriented objectives
• Non-compliance with tax provisions
• Inactive or paper-based institutions

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How Saving Mantra Supports You

Saving Mantra offers complete Section 35 approval services, including:

• Eligibility assessment
• Research documentation structuring
• Application filing & follow-ups
• Liaison with tax authorities
• Ongoing compliance advisory

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Disclaimer

This content is for informational purposes only and does not constitute legal, tax, or professional advice. Provisions under the Income Tax Act are subject to change. Readers are advised to consult qualified professionals before applying. Saving Mantra shall not be liable for actions taken based on this information.

Introduction to FCRA Registration

Foreign Contribution Regulation Act (FCRA) registration is mandatory for NGOs, trusts, societies, and Section 8 companies in India that wish to receive foreign donations or grants. The registration is governed by the Ministry of Home Affairs (MHA) and aims to ensure transparency, accountability, and national interest protection.

This Saving Mantra guide explains the exact step-by-step FCRA registration process, eligibility conditions, required documents, timelines, and post-registration compliance—ideal for beginners and professionals.

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Who Needs FCRA Registration?

FCRA registration is required for:

• Charitable Trusts
• Registered Societies
• Section 8 Companies
• NGOs receiving foreign funds, donations, or grants

Foreign contribution includes money, articles, or securities received from a foreign source.

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Types of FCRA Approval

1. FCRA Registration

• Permanent approval
• Valid for 5 years
• Suitable for organizations with a proven track record

2. FCRA Prior Permission

• One-time approval
• For specific donor and purpose
• Ideal for new organizations

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Eligibility Criteria for FCRA Registration

To apply for FCRA registration, the organization must:

• Be registered for minimum 3 years
• Have carried out genuine charitable activities
• Have spent at least ₹15 lakh on core activities in last 3 years
• Not be involved in religious conversion or political activities
• Not be blacklisted or prosecuted under any law

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Step-by-Step Process for FCRA Registration in India

Step 1: NGO Legal Registration

Ensure your entity is registered as:

• Trust (under Trust Act)
• Society (under Societies Registration Act)
• Section 8 Company (Companies Act, 2013)

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Step 2: Open FCRA Designated Bank Account

• Mandatory FCRA account at SBI, New Delhi (Sansad Marg Branch)
• No other bank is permitted for receiving foreign contribution

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Step 3: Prepare Required Documents

Collect and scan documents (PDF format):

• Registration certificate of NGO
• Memorandum of Association / Trust Deed
• PAN of NGO
• Aadhaar & PAN of office bearers
• Activity report (last 3 years)
• Audited financial statements (3 years)
• Darpan ID (NGO Darpan Portal)
• Board resolution authorizing FCRA application

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Step 4: Online Application on FCRA Portal

• Visit official FCRA online portal
• Select Form FC-3A (Registration) or FC-3B (Prior Permission)
• Fill organizational, bank, and activity details
• Upload documents
• Pay government fee online

Government Fees:

• FCRA Registration: ₹10,000
• Prior Permission: ₹5,000

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Step 5: Background Verification

• MHA conducts background checks
• May seek clarification or additional documents
• Physical inspection may be conducted in some cases

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Step 6: Grant of FCRA Certificate

• If satisfied, MHA grants FCRA Registration
• Certificate validity: 5 years
• Unique FCRA Registration Number issued

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Time Required for FCRA Registration

• Standard processing time: 90–180 days
• Can extend if clarifications are required

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Post FCRA Registration Compliance

After approval, the NGO must:

• Receive funds only in FCRA-designated account
• File Annual FCRA Return (Form FC-4) before 31st December
• Maintain separate books of accounts
• Renew FCRA registration every 5 years
• Inform MHA of changes in board, address, or bank

Non-compliance can lead to suspension or cancellation of FCRA registration.

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Common Reasons for FCRA Rejection

• Incomplete or incorrect documentation
• Insufficient activity proof
• Non-compliant objectives
• Mismatch in financial records
• Past legal or regulatory violations

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How Saving Mantra Helps You

Saving Mantra provides end-to-end FCRA registration services, including:

• Eligibility assessment
• Document preparation & verification
• FCRA account assistance
• Online filing & follow-ups
• Compliance & annual return support

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Disclaimer

This article is for informational purposes only and does not constitute legal or professional advice. FCRA rules and procedures are subject to change as per government notifications. Readers are advised to consult qualified professionals before taking any action. Saving Mantra is not responsible for decisions made based on this content.

Step-by-Step GSTR-1 Filing for Turnover Below ₹1.5 Crore

Filing GSTR-1 is a crucial part of GST compliance for any registered business. For small taxpayers with annual turnover below ₹1.5 crore, the process is simpler, but accuracy is key to avoid notices or penalties. Follow this guide to file your GSTR-1 smoothly.

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Step 1: Check Eligibility

• Applicable for businesses with turnover below ₹1.5 crore.
• Eligible taxpayers can file quarterly GSTR-1 instead of monthly.
• Ensure your GST registration is active.

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Step 2: Gather Your Sales Data

Collect all sales invoices for the period:

• B2B (Business to Business) invoices
• B2C (Business to Consumer) invoices
• Export sales, if any
• Credit/Debit notes

Tip: Ensure invoices are accurate and match your accounting records.

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Step 3: Log in to the GST Portal

1. Visit www.gst.gov.in
2. Enter your GSTIN, username, and password
3. Go to Returns Dashboard → GSTR-1 → Prepare Online

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Step 4: Enter Invoice Details

• Fill B2B invoices in the respective section.
• Add B2C invoices or use summary mode if transactions are numerous.
• Include any export invoices and credit/debit notes.

Note: For turnover below ₹1.5 crore, quarterly summary is sufficient.

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Step 5: Review & Validate

• Cross-check totals for errors.
• Ensure HSN codes, GSTINs, and invoice numbers are correct.
• Validate entries using the GST portal’s validation tool.

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Step 6: Submit GSTR-1

• Click Submit once all invoices are verified.
• If using offline tools, upload the JSON file prepared from accounting software.
• After submission, the portal will display a success message.

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Step 7: File GSTR-3B

• GSTR-1 filing feeds into GSTR-3B.
• Ensure your GSTR-3B matches the turnover and tax liability reported in GSTR-1.

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Tips for Smooth Filing

• Keep invoices updated monthly, even if filing quarterly.
• Use accounting software integrated with GST.
• Always download the acknowledgment for your records.

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Disclaimer

This blog is for educational purposes only. Consult a qualified GST practitioner or CA before filing returns. The author or website is not responsible for any penalties arising from errors or omissions.