Tax on ngo
This query is : Resolved
Swastik Upadhyay
(Querist)
02 July 2012
Do NGO pay taxes?
Amol S Joglekar
(Expert)
02 July 2012
Yes unless registered under sec 12A under Income Tax.
Swastik Upadhyay
(Querist)
02 July 2012
if i registered 12A thn i dont need to pay any tax
Amol S Joglekar
(Expert)
03 July 2012
You need to compute your income in accordance with 11, 12 and 13. Apply the income properly, invest it in the approprate securities. Then you can have a ZERO tax status.
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Swastik Upadhyay
(Querist)
03 July 2012
Wht does appropriate securities u referring to? Is 11, 12, 13 are any Section of IT?
26 July 2025
Yes, Sections 11, 12, and 13 refer to provisions of the **Income Tax Act, 1961**, which govern taxation of charitable trusts and NGOs.
Here's a quick breakdown:
* **Section 11**: Deals with exemption of income derived from property held for charitable or religious purposes, **if the income is applied or accumulated for charitable purposes**.
* **Section 12**: Specifies income received by a trust or institution from voluntary contributions, donations, or other sources for charitable purposes and how it should be applied or accumulated.
* **Section 13**: Specifies conditions under which the exemption under Sections 11 and 12 can be denied (like if income is used for private benefit, or for certain prohibited purposes).
---
### What are "appropriate securities"?
To maintain tax-exempt status, an NGO/trust is required to apply its income for charitable purposes, and any surplus income should be **invested or deposited in specified modes** — these are the "appropriate securities" defined by the IT Act. These include:
* Government securities
* Fixed deposits with scheduled banks
* Other notified securities or modes prescribed by the tax authorities
This ensures the income is safely invested and used only for charitable objectives.
---
### Summary:
* Registering under **Section 12A** grants tax exemption status to your NGO/trust.
* To maintain this, you must follow rules under Sections 11, 12, and 13 about income application and investments.
* Income must be used for charitable purposes or invested in approved securities to retain exemption.
If you want, I can help explain how to apply for 12A registration or more on Sections 11-13!
Here's a quick breakdown:
* **Section 11**: Deals with exemption of income derived from property held for charitable or religious purposes, **if the income is applied or accumulated for charitable purposes**.
* **Section 12**: Specifies income received by a trust or institution from voluntary contributions, donations, or other sources for charitable purposes and how it should be applied or accumulated.
* **Section 13**: Specifies conditions under which the exemption under Sections 11 and 12 can be denied (like if income is used for private benefit, or for certain prohibited purposes).
---
### What are "appropriate securities"?
To maintain tax-exempt status, an NGO/trust is required to apply its income for charitable purposes, and any surplus income should be **invested or deposited in specified modes** — these are the "appropriate securities" defined by the IT Act. These include:
* Government securities
* Fixed deposits with scheduled banks
* Other notified securities or modes prescribed by the tax authorities
This ensures the income is safely invested and used only for charitable objectives.
---
### Summary:
* Registering under **Section 12A** grants tax exemption status to your NGO/trust.
* To maintain this, you must follow rules under Sections 11, 12, and 13 about income application and investments.
* Income must be used for charitable purposes or invested in approved securities to retain exemption.
If you want, I can help explain how to apply for 12A registration or more on Sections 11-13!
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