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Registration of NGOs under the provisions
of 35AC of the Income Tax Act is less known but a highly useful
instrument of fund raising for some social cause. The objective
of the said provision is to encourage business organisations and
wealthy individuals to contribute more in social and economic
welfare and uplift of general public. With the increased
emphasis on the corporate social responsibility and ostentatious
display of charity by people like Bill Gates and Warren Buffet,
the contribution in monetary term by the corporate sector in
India towards socially relevant project cannot be undermined.
NGOs 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 or
wealthy individuals and fulfil their objective of development.
Thus, Section 35AC can be used as an effective tool of fund
raising by NGOs. Millions of rupees could be raised from this
facility. It can also lead to a mutually beneficial relationship
between NGOs and the corporate sector. By donating any amount
for any approved project under the provisions of 35AC, a donor
will receive 100% rebate of income tax on the donated amount. An
application can be made for this purpose to the Secretary of the
National Committee for Promotion of Social and Economic Welfare,
Department of Revenue, Government of India, North Block, New
Delhi-110001 in a prescribed format.
Normally, a approved amount could be raised and utilised within
a given period. In selective cases extension of period could be
permitted for completion of the project. Generally, such
notified ‘Eligible Project or Scheme get the node of the
National Committee as mentioned below:
i) Construction and maintenance of drinking water projects in
rural areas and in urban slums including installation of pump
sets, digging of wells, tubewells and laying of pipes for supply
of drinking water;
ii) Construction of dwelling units for the economically weaker
sections;
iii) Construction of school buildings primarily for children
belonging to the economically weaker sections of the society;
iv) Establishment and running of non-conventional and renewable
source of energy systems;
v) Construction and maintenance of bridges, public highways and
other roads;
vi) Any other programme for uplift of the rural poor or the
urban slum dwellers.
Committee may consider fit for support:
i) Promotion of sports;
ii) Pollution control;
iii) Establishment and running of educational institutions in
rural areas, exclusively for women and children up to 12 years
of age;
iv) Establishment and running of hospitals and medical
facilities in rural areas exclusively for women and children up
to 12 years of age.
Care should be taken that a proper project is developed for
helping people without discriminating on the basis of caste,
creed or gender. |
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