Tax Implications of Alumni Union (R) under Society Act

• A society is taxable like an AOP unless registered under 12A/12AB.

• No mandatory spending unless you take 12A/12AB exemption.

• If registered under 12A/12AB → must apply 85% of income to objects.

• Recommended to take 12A/12AB for tax-free operations.

Registration under the Karnataka Societies Registration Act does not by itself make the alumni union exempt from income tax. Donations and other receipts are generally considered in computing its taxable income; the result depends on the union’s objects, activities, receipts and expenditure. It should obtain a PAN, maintain books and file the applicable return where required. If it wants charitable-tax exemptions, it would generally need to qualify and obtain registration under the Income-tax Act, such as registration under section 12AB; merely collecting donations or being a society is not enough.

There is no general rule requiring every society to spend a fixed percentage of all donations merely because it is registered under the Societies Act. The familiar 85% application condition relates to claiming exemption under section 11 by an eligible, registered charitable institution, and is subject to the Act’s rules on accumulation and other conditions. Whether an alumni association’s activities qualify as charitable depends on its objects and actual work.

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