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GST On All Religions Of India

The provisions are related to the taxation activities of all religious like Mandir, Gurudwara, etc. that have been borrowed and contributed by people. However, all services are not exempt, and exempted services provided by such entities registered under Section 12AA of the Income Tax Act by way of Religious Trust are exempt from the whole of GST. This means there is no need to pay any tax on such cases if the following conditions are fulfilled.

Firstly, all entities that are providing Religious activities must be registered under Section 12AA of the Income Tax Act.

All services related to Religious activities by the entities

Now we will outline few activities which conduct by a religious place time to time, few of these are:-

GST payable on Haj pilgrimage services by Private Tour Operators

GST shall be Levied on Entry Fees Collected from Visitors/Devotees/Pilgrims Authority for Advance Ruling

Contribution from members or Donation from Members

Prasadam supplied by religious places like temples, mosques, churches, gurudwaras, dargahs, etc.

Puja samagri

Conduct of any religious ceremony

Renting of surrounding areas of a religious place

GST on the running of public libraries for the lending of books by religious places like temples, mosques, churches, gurudwaras, dargahs, etc.

Publication Sales

Participation in activities:

Training or Coaching in recreational activities:

Interest Income:

√GST implication on services availed of private Tour Operators to visit Religious place :-

There is no exemption available to services of religious pilgrimage of any religion provided by any private tour operator and pay tax 5% (if the Operator is not availing ITC) otherwise 18% be chargeability .

However exemption is available by way of entry No. 60 of Notification No. 12/2017- Central Tax Rate  , on services of religious pilgrimage facilitated by Government of India whether Central Government or state government .

√GST applicability on  Entry Fees Collected from Visitors/Devotees/Pilgrims?

The issued raised by M/s Shri Digamber Jain Sidhkut Chaityalaya Temple Trust and the Authority for Advance Ruling noted that the applicant would be engaged in service of darshan of Temple Hall and provide insight into principles of Jainism along with teachings of Tirthankara to visitors, which can be considered as advancement of religion.

Therefore, it was held that the amount received by applicant would be considered as consideration for supply of service and it would be eligible to claim benefit of Notification No. 12/2017-CT (Rate) and it would not be required to pay any tax under GST.

√Contribution from members for an exempt activity

Donation/voluntary contribution from members voluntary can never be treated as supply as there is no Bilateral Relationship.

When Donation received from the Members , after this temple sole discretion how to use such money for the purpose of Enhancing religious activity for Public at large.

Donation can not be treated as supply so the question to Chargeability of GST should not arise.   

√Prasadam supplied by religious places like temples, mosques, churches, gurudwaras, dargahs, etc.

Ministry has clarified  ‘prasadam’ supplied by religious places like temples, mosques, churches and gurudwaras will not be subject to any Central, State or Integrated GST, as the case may be.

However, some of the ingredients and input services required for making the same would be subject to taxation under the new GST rate Notification. These include sugar, vegetable edible oils, ghee, butter, service for transportation of these goods and so on.

√GST on Puja samagiri

Puja Samagiri mostly used in Hindu Temples which could contain different type of ingredients, here we list out few items:- Learn More:

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GST ON DHARAMSHALA

According to Hindu usage of GST on dharamshala, which are traditional rest houses typically associated with religious and charitable trusts, several factors come into play.

Firstly, all entities that provide charitable activities must be registered under Section 12AA of the Income Tax Act.

All services related to charitable activities by the entities.

Who can run the dharamshala?

Religious organizations like temples, churches, mosques, gurudwaras, etc.

Religious Trusts

Charitable Trusts

Non-Government Organizations (NGOs)

Caste-based or community-based organizations

State governments and local bodies

Private Trusts and Foundations

There are multiple laws that are applicable to dharamshalas for operations.

Registration and legal status

√Trusts and Societies Acts:

Many dharamshalas are operated by religious or charitable trusts or societies. They must be registered under the relevant state or national laws governing trusts and societies, such as:

Trusts and Societies Act, 1882

Society Registration Act, 1860

√Taxations Laws: 

Goods and Services Act: The GST Act governs the taxation of goods and services provided by dharamshalas. They must comply with GST regulations if their annual turnover exceeds the threshold limits or if they provide taxable services.

Income Tax Act, 1961: Charitable and religious institutions may be eligible for income tax exemptions under sections such as Section 11 and Section 12 of the Income Tax Act, provided they meet certain criteria.

Municipal and Local Laws Shops and Establishments Acts:

Charity Commissioner Regulations

Religious Endowments Acts

Foreign Contribution (Regulation) Act, 2010 (FCRA)

Environmental Laws

Now we will outline a few activities that are conducted by a religious member for charitable purposes from time to time. A few of these are:

Catering/Food Services

Renting premises for events

Publication Sales

Participation in activities:

Training or coaching in recreational activities:

Interest Income

√Catering/Food Services:

If the dharamshalas provide meals to its guests, either included in the accommodation package or separately, these services will attract GST. Separate invoicing for food services may be necessary to comply with GST regulations, and if GST rates are applicable to food, catering then has to pay a 5% GST rate with no option to claim ITC 5%. GST on restaurant services, including room service and takeout, provided by restaurants located within a hotel featuring a room tariff less than Rs. 7,500. 5% GST on any food or drink (non-alcoholic) served at a cafeteria, canteen, or mess operating on a contract basis in an office, industrial unit, school, college, hostel, dharamshalas, etc.

√Renting premises for events

As per clause 5(a) of Exemption Notification No. 25/2012-ST dated June 20, 2012, “Renting of precincts of a religious place for charitable purposes meant for the general public” is exempt.

The exemption is not applicable to:

Renting of rooms where charges are Rs. 1,000 or more per day;

Renting of premises, community halls, kalyanmandapam or open area, and the like where charges are Rs. 10,000 or more per day;

Renting of shops or other spaces for business or commerce where charges are Rs. 10,000 or more per month.

√Publication sales:

The business definition covers the sale of publications by charitable organizations. The sale of consideration is covered in the definition of supply, so it will be covered under GST. However, books are covered under HSN code 4901, and newspapers and monthly journals are covered under HSN code 4902. These then attract NIL-rated GST. But yearly printed calendars covered under HSN Code 4910 attract a 12% GST rate. So, the conclusion is that publication sales are taxable, and these provisions are applicable to all NPOs.

Recently, the Maharashtra Authority for Advance Ruling in the case of Shrimad Raj Chandra Adhyatmik Satsang Sadhana Kendra held that the income of religious organizations from the sale of books, DVDs, magazines, and other such materials along with food would come within the GST purview as these activities are not “charitable activities.” All such activities shall be treated as business activities on which GST will have to be charged and paid. The advancement of religion or spirituality is exempt under the GST Act as a charitable activity, but there is no specific exemption listed out in the Act in respect of incidental or ancillary services provided by the trust. To be eligible for any exemption, the applicant should qualify for each condition without any dependence on a third party.

√Participation in activities: Learn More

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How to prepare CSR-1 form and file under MCA

PROCEDURE TO FILE CSR-1 REGISTRATION TO MCA

This form is mandatory for all registered entities, societies, trusts, Section 8 companies, and other entities engaged in CSR activities.

This form is available on the MCA portal for Version 2 (V2), which is the CSR-1 e-form, and is mandatory to be filed by social organizations seeking CSR funds and CSR implementing agencies. This e-form is on Straight-through Process (STP), which means e-filling is auto-approved without manual interpretations.

The applicant needs to go on the MCA website, click on MCA Services, and there is a left-side option for e-filling. Then, see the second drop-down where the company forms are downloaded.

Scroll down until the topic “Incorporation Services” is reached, then click on the Registration of Entities for Undertaking CSR Activities, then download the e-form CSR-1, which will be downloaded in ZIP format. Unzip this file and extract it by right clicking.

Then open the PDF file named “CSR-1.”

Access the official website of the Ministry of Corporate Affairs by the applicant needs to file Form CSR-1 by logging in to the V2 portal and uploading this form.

After logging into the V2 portal, enter a valid corporate identity number (CIN) for the cancellation of an unused share of one class and an increase in share capital.

Select the purpose of the e-form.

Declaration and digital signature on the CSR-1 form

If attached is the DSC of the director, then an approved DIN needs to be provided.

If the person digitally signing this form is a manager, then there is a need for a valid income tax PAN or approved DIN.

If the company secretary signs the form, then there is a need for a membership number for filling out this form. Learn More:

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WHY CHOOSE US FOR NGO AND LICENSE REGISTRATION SERVICES?

Setting Up Impact: The Roadmap to NGO Registration and Licensing.

Registration is important for the following reasons the legal Arms of an NGO which requires registration gives legal recognition to an NGO-highlighting its existence as a formal and legal entity. More often this is done in order to perform different kinds of activities, sign contracts or provide organizations’ funding. This is why being registered would in a way bring an NGOs credibility and trustworthiness to its donors, beneficiaries and other persons interested. Annual reports are a testimony to have committed to the issue of transparency and accountability to regulations.

This paper sourced most of its information through a survey of 50 NGOs registered in Uganda, and through interviews with employees of some of these NGOs on the factors influencing their decision on registering with the register of gazette NGOs. Ngo registration provides the organization with a legal identity and opens doors to financial resources that can fund the continuous and enlargement of the organization.

The legal status allows registered NGOs to obtain certain privileges like tax deductions or other organizational benefits that decrease the expenses for an NGO and direct all the available resources towards the implementation of their programs. _ Registration affords the NGO legal means of representing it, and course all its members from personal responsibility in situations of wrong doings or otherwise financial responsibilities that the organization may have incurred legally.

Now the question arises that why we are better for registration services?

Well we are better because we have been providing service for more than 10 years and we emphasize your NGOs expertise and experience in assisting with registrations. we also provide a special support during the Ngo registration process. At NGO Pilot we understand the importance of seamless Ngo registration and licensing processes. Here’s why we stand out:

1} Our Expertise:

Our team is highly skilled, including the lawyers who have professional experience in registration and licensing, the main problem will not occur or can be solved. They provide support for all clients including the business organization and give special attention to each since its type differs. Learn More:

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HOW TO REPORT INCOME IN ITR 7 BY THE CHARITABLE ORGANISATIONS

Non-governmental organizations especially those with charitable status have a significant responsibility of meeting societal needs proffering assistance to less privileged groups in the society, and advocating for change. Such organizations are non-business organizations; consequently, any excess of revenues exceeds expenses is channelled back to the purpose of the organization and not as profit.

Non-profit organizations, as charitable organizations, have a responsibility to uphold legal standards in order to remain a tax exempted organization and to possess the trust of the public. To do so, they are usually obliged to legally register organizations with the state, and report regularly to it on their financial standing and work plans, balance of incomes and expenditures, and other activities. Transparency and accountability are critical in making certain that such organizations stay committed to the mission for which they were established and also in efficient usage of resources.

SO in this article we further brief about the Income point , how the organisation need to report their income in ITR 7 , which schedule need to filled by them to file correct income tax Return.

Schedule of Voluntary Contributions (schedule vC)

Voluntary contributions are a vital source of funding for charitable organizations. Donations are always considered to be an important source of revenue for non-profit organizations. As you can see in Schedule VC, It is divided in 5 parts which is A, B, C, D, and E. Let’s discusss it in quite depth, A indicates the Domestic Contribution which is other than anonymous donations taxable u/s 115 BBC. B Indicates the Foreign Contribution which is also other than anonymous donations taxable u/s 115 BBC. C indicates both the part A and B Total contributions (Aiii + Biii). D indicates the Anonymous Donations chargeable u/s 115 BBC. And at last E also indicates Anonymous donations which is other than those included at SI. NO. Diii.

It contains information about ‘voluntary contributions’ data. Here, all the break up of corpus and non-corpus donations, grants received from the Government, grants received from companies under CSR, foreign contribution etc. are to be provided. In addition, details of anonymous donations which are provided and recoverable under section 115BBC are required to be furnished separately. Learn More

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How to File ITR-7 by University or Educational Institution U/s 10(23C)(VI):-

Any university or other educational institution which is maintained for educational purposes and not for profit, other than :-

(iiiab)any university or other educational institution being an organisation which exists mainly for the purpose of providing education and not for the purpose of making profits and which is funded mainly by the Government or

(iiiad) any university or other educational institution existing solely for educational purposes and not for purposes of profit if the aggregate annual receipts of the person from such university or universities or educational institution or educational institutions do not exceed five crore rupees

Has to filed their income tax return every year, for the same in this article we provide understanding for how to report income and expenses by such organization in the AY 2024–25:-

General details of organization — Part A :-

Part A required the Introductory detail of Such University or Educational Institution Like name , address Pan no. and contact details . Also A18 is specific column which Required detail for Type of Project Run by Such Institution and A19 and A 29 is required to fill detail of various registrations and detail of various of Organizations. Learn More:

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GST amnesty scheme for 2017–18,2018–19 & 2019–20

In the GST Notification №21/2024–Central Tax issued on October 8, 2024 taxpayers are granted substantial relief removing interest and penalties with regard to tax demands claimable under section 73 of the CGST act for the three financial years ending 2017–18, 2018–19 and 2019–20. This notification helps to ensure compliance through the addition of exceptions to the extra charges which apply if the taxpayer pays their taxes within certain deadlines.

Waiver deadlines and conditions

Persons who have been issued with such notices, statements or orders under Section 128A of the CGST Act must pay outstanding amount of tax by March 31, 2025. For the parties involved in Section 74’s tax redetermination cases, the waiver time concludes at six months since the generation of the redetermination order.

Learn more

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HOW TO REPORT INCOME IN ITR 7 BY THE CHARITABLE ORGANISATIONS

Schedule of Voluntary Contributions (schedule vC)

Voluntary contributions are a vital source of funding for charitable organizations. Donations are always considered to be an important source of revenue for non-profit organizations. As you can see in Schedule VC, It is divided in 5 parts which is A, B, C, D, and E. Let’s discusss it in quite depth, A indicates the Domestic Contribution which is other than anonymous donations taxable u/s 115 BBC. B Indicates the Foreign Contribution which is also other than anonymous donations taxable u/s 115 BBC. C indicates both the part A and B Total contributions (Aiii + Biii). D indicates the Anonymous Donations chargeable u/s 115 BBC. And at last E also indicates Anonymous donations which is other than those included at SI. NO. Diii.

It contains information about ‘voluntary contributions’ data. Here, all the break up of corpus and non-corpus donations, grants received from the Government, grants received from companies under CSR, foreign contribution etc. are to be provided. In addition, details of anonymous donations which are provided and recoverable under section 115BBC are required to be furnished separately.

Aggregate Income – (Schedule AI)

One of the most important concepts for charitable organizations is that of aggregate income, which is the total income received in certain period from all sources. This income can be in form of donations, grant, investment income and income which results from fundraising exercises or sales of other products/services. As you can see Aggregate Income divided in 10 points which is Receipts from main objects, Receipts from incidental objects, Rent, Commission, Dividend income, Interest income, Agriculture income, Net consideration on transfer of capital asset Any other income (specify nature and amount) and at last 10th section is the total sum of 1 to 9 sections.

This Schedule is to be filled by the asses sees, who want to claim exemption u/s 10(23C)(iv)/(v)/(vi)/(via) or u/s 11. This schedule applies to the details of the income, other than voluntary contribution, specified under sections 11 and 12 of the source-wise.

So in summary if we understand relates to All income other than Donation which is covered under schedule VC. In AI we covered all income which is not related to donation.

Clubbing AI and VC schedule can provide the complete income details of charitable organisations and other who is filing ITR 7 .

Overall, group income gives a complete picture of a charitable organization financial health and also contributes to its efficiency in realization of its goals and improvement of the world.

DISCLAIMER: The information provided in this article is intended for general informational purposes only and is based on the latest guidelines and regulations. While we strive to ensure the accuracy and completeness of the information, it may not reflect the most current legal or regulatory changes. Taxpayers are advised to consult with a qualified tax professional or you may contact to our tax advisor team through Whatsapp:- +91-9871990888 or info@ngopilot.in .

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“Social Stock Exchange Faces Delisting Dilemma"

When To Delist From The Social Stock Exchange

There are wolves hidden under the cover of the law because non-profit organizations’ alternative financing methods using such common tools as debt and shares are severely limited. But at the same time, it is possible to get resources as the zero coupon zero principal bonds are placed on the SSE. ZCZP bonds that carry an equal tenure to the duration of the project for that which is funded, and at tenure, they will be written off the investee’s books. These instruments are for those investors who are looking to create social impact instead of not getting any return on investment. In this article, we will discuss the termination of Zero Coupon Zero Principal Instruments, which is equivalent to delisting. There are different modes of fund raising, like Equity, ZCZP, Development impact Bonds, Social Impact Funds and Donation through Mutual Fund.

About Zero Coupon Zero Principal Instruments

They are a type of financial derivative that has no periodic interest payments and no repayment of principal at maturity. They are also known as pure discount instruments or zero coupon bonds and there is no need to pay any securities transactions on zero coupon zero instrument

Zero coupon zero principle instruments (ZCZP) are financial instruments that a non-profit organization may use to raise funds. When an entity issues these securities and raises money, it is not a loan but a donation. The borrowing entity does not have to pay interest—therefore zero coupon—and does not have to pay the principal (zero principal) either. Like any other debt instrument, it will come with a time duration.

Any individual or corporate can buy the security through SSE once they are open for business.

The Finance Ministry had declared zero coupon zero principle instruments (ZCZP) as securities for the Securities Contracts (Regulation) Act, 1956. These instruments will be governed by rules by the SEBI. It will help organizations and corporates to utilize their social responsibility funds and support non-profit organizations more transparently.

This Provision is not applicable to For Profit Organization because For-profit organizations is not eligible to issue Zero Coupon Zero Principal Instruments for raising funds.

If NPO wants to renew the registration after a year and they have not raised any fund in the previous year through SSE so this is acceptable and they can do so.

Advantages

Fixed Return

Lower Credit Risk

Useful For Liability Matching

Lock In Return

Disadvantages

Interest Rate Sensitivity

Reinvestment Risk

Taxation On Imputed Interest

When bonds are issued, they are listed on Social Stock Exchange and these bonds will not be traded in the secondary market but can be transferred for other purposes. Termination of ZCZP is equal to delisting from the social stock Exchange.

Termination of the listing of Zero Coupon Zero Principal Instruments by the Social Enterprise shall occur in the following events:

When Tenure Is Over, It Is Considered Terminated From The Social Stock Exchange, Which Is Equivalent To Delisting.

When The Object For Funds Was Raised, That Has Been Achieved, And The NPO Has Submitted A Certificate To The Social Stock Exchange, It Is Also Considered A Bond That Has Been Terminated From SSE.

If The NPO Decides Not To Issue ZCZP To The Public But Only To Limited Donors, It Can Do So Privately Through Social Impact Funds Or Other Means.

Conclusion: 

If social enterprises want to terminate or delist their instruments, they must comply with the above conditions. After completing tenure and the object has been fulfilled, they will automatically delist the instrument from the social stock exchange. If the company wants to list the instruments, then it again has to list them with the process of issuing zero coupon for zero principal instruments with other purposes that should be related to eligible social activities.

DISCLAIMER: The information provided in this article is intended for general informational purposes only and is based on the latest guidelines and regulations. While we strive to ensure the accuracy and completeness of the information, it may not reflect the most current legal or regulatory changes. Taxpayers are advised to consult with a qualified tax professional or you may contact to our tax advisor team through call +91-9871990888 or info@ngopilot.in.

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Social Stock Exchange SSE Listed Compliances

The Compliances That Need To Be Done If Listed Once On Social Stock Exchange SSE?

There are regulatory changes that Security and Exchange Board Of India (SEBI) is undertaking to enable SSE in India. Social stock exchange SSE-listed companies must also comply with SEBI regulations, including those relating to corporate governance, disclosure requirements, and insider trading. There are two types of social enterprises that can be registered on Social Stock Exchange SSE with the following eligibility criteria, and before listed instruments on the recognized stock exchange, they have to follow the below compliances.

Pre-listing: Declaration of Zero Coupon Zero Instruments as securities under the Securities Contracts (Regulations) Act, 1956, and SEBI (Alternate Investment Funds) governing fund-raising investment in social impact funds.

Listing: SEBI (ICDR) Regulations, 2018

Post Listing: SEBI (LODR) Regulations 2015

Conclusion: In India, this platform is new as compared to the NSE or BSE, which is a separate segment of the existing stock exchange that can help social enterprises raise funds with registration and ensure adherence to good corporate governance. There are pre-listing, listing, and post-listing compliances for NPOs and For-Profit Social Enterprises (FP0) by way of following the regulatory compliances of SEBI.

DISCLAIMER: The information provided in this article is intended for general informational purposes only and is based on the latest guidelines and regulations. While we strive to ensure the accuracy and completeness of the information, it may not reflect the most current legal or regulatory changes. Taxpayers are advised to consult with a qualified tax professional or you may contact to our tax advisor team through call +91-9871990888 or info@ngopilot.in.

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Do We Earn Profit Through Investing In Social Stock Exchange (SSE)

Non-profit organizations (NPOs) and for-profit social enterprises can raise funds through the Social Stock Exchange (SSE), which is a segment of the existing stock exchange, with the help of organizations. This is a new approach to investment, and financial investments are made with the intent to generate social impact as well as financial returns.

Why The Need For Social Stock Exchange (SSE)? It Can Also Help To:

Streamline Reporting And Compliance: Provide A Unified Reporting Framework For Investors And Social Organizations While Ensuring Transparency And Accountability In The Use Of Funds.

Promote Inclusivity: Welcome A Diverse Range Of Organizations, Including For-Profit Entities, Collectives Like Federations, And Self-Help Groups (SHGs).

Facilitate Funding And Growth: Help Social Enterprises Grow By Facilitating Funding.

Ensure Robust Standards: Ensure Robust Standards Of Social Impact And Financial Reporting.

Unlock New Funding Sources: Unlock New Domestic Funding Sources To Bolster Long-Term Development. 

How Can Investors Buy These Instruments?

All forms are available on social stock exchanges for investors to buy the zero-coupon instruments through the application form that is also available on the website and pay payment by way of a check or demand draft, which is then attached to the application form by submitting the form to the Registrar Transfer Agent (RTA) before the issue closing date. If transfer through electronic to the escrow account then the application form must be mention URN no. and date of Transfer in the application Form. Every investor must have a Demat account to reflect the money from the allotment.

TAX INCENTIVES FOR INVESTORS & DONORS

The draft WG report recommends the following tax incentives for investors and donors:

Exempt Investors From Paying Securities Transaction Tax  (STT) For Trades Made On The Social Stock Exchange (SSE)

Exempt Investors From Paying Capital Capital Gains Tax (CGT) On Long-Term Capital Gains Accruing From The Sale Of Securities In The Social Stock Exchange (SSE).

Allow Philanthropic Donors To Claim A 100% Tax Exemption For Their Donations To All NPOs That Benefit From The SSE. Under The Existing Income Tax Provisions, Only Certain Funds Registered Under 12AA Are Eligible For A 100% Tax Deduction, And The Rest Are Eligible For A 50% Tax Deduction.

Allow All Investments Made In Securities Or Instruments Of NPOs Listed On The SSE To Be Tax Deductible.

Allow Corporations To Deduct CSR Expenditures That Go To The SSE From Their Taxable Income.

Remove The 10% Cap On Income Eligible For Deduction Under 80G For Donations To All NPOs That Benefit From The SSE.

Allow First-Time Retail Investors To Avail Themselves Of A 100% Tax Exemption On Their Investments In The SSE MF Structure, Subject To An Overall Limit Of Rs. 1 Lakh.

Can You Actually Trade With These Bonds?

Firstly, the Zero Coupon Zero Principle is not tradable, and these instruments create a unique bridge between the Social Stock Exchange (SSE), or charitable organizations, and potential donors. Far from traditional bonds or equity, the Zero Coupon Zero Principle doesn’t yield interest, nor do they return the principal amount upon maturity; instead, they operate as pure donations.

How Is This Different From Donating Directly To NGOs?

Investing through SSE is different from direct donations. It offers a structured way to support social causes, with added benefits like transparency, legitimacy, and potential tax benefits not usually available with direct donations. Further, investing in the stocks or bonds of social enterprises also provides financial return potential. While investments in NPOs are purely philanthropic and don’t offer financial returns, investing in social enterprises is like impact investing, where you aim for both social impact and financial gains.

Conclusion: In summary, the SSE is a pioneering effort in India, providing a transparent and structured platform for impact investments. This is a unique opportunity for investors to contribute money because of a meaningful social cause, backed by regular impact assessments and reporting.

DISCLAIMER: The information provided in this article is intended for general informational purposes only and is based on the latest guidelines and regulations. While we strive to ensure the accuracy and completeness of the information, it may not reflect the most current legal or regulatory changes. Taxpayers are advised to consult with a qualified tax professional or you may contact to our tax advisor team through call +91-9871990888 or info@ngopilot.in.

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THE ROLE OF CSR IN BANKING INDUSTRY

CSR in the banking industry in the banking industry involves itself in the various steps that help in the implementation of sustainable development objectives and helps in maintaining relationship with the stakeholders. Banks being financial intermediaries play a critical role in determining the economic development of a country and social and ecological welfare. By necessity, CSR programs are now focused on areas like financial literacy, or community welfare, and environment among other things.

Another popular type of CSR is financial literacy as a form of an organized program that would teach people how to manage their money. Thus, by providing communities with knowledge, the banks can decrease the rate of financial exclusion, as well as increase the level of economic readiness. Also, banks go for social responsibilities and engage in funding projects such as supporting business, education, and health facilities within communities. This investment is not just a booster to delivers the comforts to the life of people but also strengthens the economy to grow, making it a continuous cycle in improving the social status.

There is also a major effort in the area of ecological responsibility Another important aspect is environmental stability To this big theme, bank are also making great progress. In the green banking practice, the financial institution supports renewable energy funding and carries out an eco-friendly procedure to lower its carbon record. Thus, the corporate attempts conform to the international standards of sustainable development and highlight environmental responsibility.

Also, banks avoid giving their financial products and services to certain industries, activities that are deemed risky. Banks help maintain ethical standards in the banking industry through rendering their decision-making processes using environmental, social, and governance (ESG) criteria.

In conclusion, CSR as appreciated in the case of the sample investigated banks is not an act of charity but rather a formula for economic and social development. In various ways, it is seen that the banks work on the social and environmental issues to gain the trust and the loyalty of the customers and the society. The the importance of CSR-hore is continually being appreciated the world over and therefore; banks are equally embracing themselves to be the agents for change and part of the solution to the better world.

DISCLAIMER: The information provided in this article is intended for general informational purposes only and is based on the latest guidelines and regulations. While we strive to ensure the accuracy and completeness of the information, it may not reflect the most current legal or regulatory changes. Taxpayers are advised to consult with a qualified tax professional or you may contact to our tax advisor team through call +91-9871990888 or info@ngopilot.in.

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THE FUTURE OF NGOs IN INDIA: TRENDS AND PREDICTIONS.

CSR is the most important business that aims to support society’s goals and contribute to the betterment of society. In this article, I will elaborate on the future of NGOs and predictions in light of CSR. The NGO sector in India has come a long way in the last decades because of increasing social issues in India.

Key Trends Shaping The Future Of Indian NGOs

Environment sustainability: Companies are focusing on CSR activities, which are a part of social welfare, like minimum waste management, renewable energy sources, and a positive impact on society. If a company fulfils the criteria of Section 135 of the Companies Act, then companies give a contribution of their profits to cover CSR activities.

Focus on Sustainable Development Goals (SDGs): which were adopted in September 2015, and the goals of SDGs are to eradicate poverty, combat inequality, and grow society. SDGs leverage CSR to achieve a life of dignity and opportunity for all.

Increased focus on Transparency and Accountability: If transparency is making contributions from international sources, then NGOs need to follow the regulatory compliances of FCRA and other legal frameworks, so they need to adopt a robust monitoring and evaluation system.

Digital Transformation: This tool is increasing day by day because of the adoption of technology, like fundraising electronically by Paytm, Google Pay, etc., and awareness campaigns. So, there is an increase in social media applications, which enhances their effectiveness.

Diversification Of Funding Sources (Corporate Social Responsibility (CSR): 

There are new funding opportunities for NGOs by providing corporate contributions, which are part of the profit and cover CSR activities. There is a crowdfunding and social exchange enterprise platform for raising capital and issuing instruments to investors.

Predictions For The Future Of The NGO Sector In India

Easily market access on SSE: SSE was thought of as a mechanism to link NGOs and social enterprises with the capital markets. This platform increases opportunities, enhances transparency, unlocks new capital sources, and increases its reputation.

Increased focus on impact investment: Impact investors are looking for organizations that can make a positive impact on society along with financial returns.

Adoptions of sustainable business models: NGOs are increasingly adopting sustainable development models to achieve financial sustainability, like social enterprises, adopting a hybrid model.

Greater collaboration with government: governments focus on social contributions or welfare; at present, there is a portal offered by NITI Aayog (Darpan) to bring about significant partnerships between the government and the voluntary sector that increase efficiency, transparency, and accountability. In the future, there will be more portals for collaboration between the government and NGOs.

Challenges Facing Indian NGOs

Regulatory and Political Environment: Restrictive Policies: Indian NGOs have rarely been subjected to strict regulations and vigilant monitoring. There is an effect on operations, especially in advocacy and human rights.

Funding Constraints: There are amendments to the law with new regulations like FCRA that can limit access to fund raising, but this is not true at all. The main challenge faced by an NGO is how they can connect with local Indian people for fund-raising. This funding constraint can well be overcome by raising local resources. There are many experts and fundraising agencies that help Indian NGOs raise funds locally. Over the last decade, the Center for Fundraising has worked with over 500 NGOs, helping them navigate the fundraising constraints and reduce their dependence on foreign grants.

Capacity Building: The NGO has invested in skill development to provide training to staff and development to remain effective. They are working on enhancing abilities in areas like digital literacy, project management, and impact assessment. They also need to work on cultivating new sectors.

Public Perception and Trust: Building Credibility: Instances of financial mismanagement and a lack of transparency have affected the credibility of some NGOs. Rebuilding trust through ethical practices and transparent operations is essential.

Limited Capacity: NGOs often lack the technical and organizational capacity to implement and fulfil their mission, and few are willing or able to invest in training for capacity building. If the capacity of NGOs is not up to par or has less capacity, it will have effects on fundraising ability, governance, leadership, and innovation.

Opportunities For Growth And Innovation

Technological Innovations: Technology for NGOs benefits the organization, the volunteers, the employees, and other stakeholders and donors. One of the ways charitable organizations can effectively and strategically capitalize on technology is by investing in an ERP solution like Oracle NetSuite because of AI tools that can enhance market access.

Advocacy and Policy Influence: NGOs that are basically oriented towards development can affect policies in areas where state policy is open to advocacy and intervention. Many crucial matters of state policy are closed to any sort of intervention from outside. Relations between civil society and the state are porous.

Strategic Partnerships: Strategic partnerships between NGOs and other organizations can be beneficial for both parties. NGOs can gain financial, human, and technical resources, as well as expertise on issues like sustainable development. They can also become more well-known and gain a stake in civil society. Businesses can benefit from charity partnerships in multiple ways, such as by tackling social and environmental issues that matter to them.

Register on social stock exchanges: The first step is for the NPO to register itself with SSE, and only eligible NPOs can list their instruments for raising funds. There have been certain minimum requirements prescribed for a not-for-profit organization to register on the Social Stock Exchange. If you register on SSE as a social enterprise, you can benefit from improved market access, minimal registration costs, additional avenues for social enterprises, and synergy between investors and investors in social aims.

Conclusion

The future of Indian NGOs is distinguished by both significant opportunities and substantial challenges. SSE will provide a new avenue for social enterprises to raise funds for social initiatives to fulfil the legal requirements. SSE will bring transparency to fund mobilization. Organizations can raise donations, and being involved in social initiatives will get more visibility. According to the above information, eligible social enterprises can be listed on SSE. Embracing digital transformation, enhancing transparency, diversifying funding sources, and aligning with global development goals will be critical for their sustained impact.

DISCLAIMER: The information provided in this article is intended for general informational purposes only and is based on the latest guidelines and regulations. While we strive to ensure the accuracy and completeness of the information, it may not reflect the most current legal or regulatory changes. Taxpayers are advised to consult with a qualified tax professional or you may contact to our tax advisor team through call +91-9871990888 or info@semantictaxgen.in.

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Social Stock Exchange Registration in India

SSE REGISTRATION OF NPO

SSE registration aim is to enable these organizations to get sustainable funding and expansion for their work of transforming people’s lives positively. Listing/Issuing of ZCZP (Zero Coupon Zero Principle) instruments by NPO after registration on social stock exchange. This is a separate segment of the recognized stock exchange that enables Social Enterprises which are NPOs to raise funds through the issuance and listing of ZCZP instruments.

The first step is for the NPO to register itself with SSE and only eligible NPOs can list their instruments for raising funds. There have been certain minimum requirements prescribed for a not-for-profit organization to register on Social Stock Exchange. There is the mandatory criteria that include the mandatory age of NPO being at least 3 years, valid certificate under U/s 12A/12AA/12AB of the income tax, valid 80G registration, annual spending of at least 50 lakhs and a minimum 10 lakh of funds in the past year. This registration is valid for 1 year and renewable after 1 year. In this case, only registered NPO can list or issue ZCZP within the registration validity period, and listing is not mandatory for registered NPO.

Registering Process Of NPO

The NPO needs to register themselves on the SME platforms of the stock exchanges, BSE SSE and NSE SSE. NPOs seeking to register must apply separately to each platform, adhering to the specific checklists and guidelines specified by both exchanges. Compliance with these distinct registration procedures is essential to ensuring successful registration and listing on both the BSE and NSE. This is valid for one year, and it can be renewed after one year. NPO have to be aware that they cannot be linked with Political or religious organization or activities, Infrastructure Company, housing finance, professional trade association and not cover in ineligible activities also.

Not for profits can get SSE Registration. Registration refers to the act of a social enterprise validated by the SSE as being eligible to raise funds. Listing is the process of making a specific type of security available on the SSE for subscription by investors. Listing refers to the specific security instrument (ZCZP/SIB/DIB etc) through which funding is mobilised on the SSE.

Registration Procedure For SSE On BSE

NPOs seeking registration on the BSE SSE must submit a formal application on their official letterhead to the BSE SSE. This application shall go along with the required documents listed below.

Certificate Of Constitution Of NPO

MOA, AOA, Trust Deed, Bye Laws Of Or Any Other Governing Document

Copy Of PAN, TAN, GST

ITR Of Last 3 Years

Audited Financial Statements Including Auditors Report For Last 3 Financial Years.

80G Registration Under Income Tax Act

Registration Certificate Under The Income Tax Act, 1961 Under Section 12AB (Along With Previous Registrations Under 12A/12AA, If Applicable) And/Or 10 (23C).

Annexure I To Be Given On The Letter Head Of The Entity Contains The Confirmation By The Entity That The Entity Is Formed And Registered Under Acts Such As Indian Trusts Act, 1882, Societies Registration Act Etc.

Annexure II Is The Certificate Of Chartered Accountant Stating Annual Spending, Past FY Funding, Filled Annual Returns Within Due Dates, And Other Information As Required Of The NPO.

Annexure III Is The Confirmation Of Eligibility Criteria For Being Identified As Social Enterprise.

Annexure IV Is The Document That Contains The Vision Statement, Mission Statement, Address, NGO Darpan Registration* Details, Its Governing Board, Number Of Staff, Details Of Statutory Auditor, Representative Letter, Key Projects Handled, Social Audit Reports/ Impact Assessment Reports For Projects (If Any)

Details Of Fee

The NGO Darpan (NGO-PS) is a portal provided by the NITI Aayog that connects NGOs, voluntary organizations, and key government ministries. It aims to enhance collaboration, efficiency, transparency, and accountability between the government and the voluntary sector. The portal helps NGOs and the government work together more effectively and offers up-to-date information on new and ongoing government projects and programs, fostering better communication and partnership.

Registration Process Of SSE On NSE

NPOs who want to register on the NSE SSE must submit a formal application on their official letterhead to the NSE SSE. This application should be go along with required documents listed below.

Application As Per Annexure I Contains The Information Of NPO Like Name, Address And Other Information. (PDF Of Annexures To Be Attached With This)

Certificate Of Constitution Under The Relevant Act Such As Public Trust Statue Of The Relevant State, Societies Registration Act, 1860, Indian Trusts Act, 1882, Companies Act, 2013

NPO Must Have Been Registered At Least 3 Years Prior To The Date Of Application

MOA, AOA, Trust Deed, Bye Laws Of Or Any Other Governing Document

Registration Certificate Under Section 12A/12AA/12AB Under Income Tax Act, 1961. Please Note That The Registration Certificate Should Be Valid For At Least Next 12 Months From Date Of Application

80G Registration Under Income Tax Act

Attach Last 3 Financial Years Audited Financial Statement Along With The Fund Flow Statement Of The Registered NPO

Annual Reports For Last 3 Financial Years As Well, In Case The Entity Is A Section 8 Company.

Resolution For Registration On Social Stock Exchange Along With The Annexures Given By The NSE For The Registration.

NPO Can Apply For Its Registration Along With The Fee In Annexure I Which Is The Format For Application Of Registration.

Annexure II Is The Undertaking From The NPO On Their Letterhead Stating The Eligibility Of The NPO To Be Identified As Social Enterprise And Information About Its Promoters.

Social Auditor Or Statutory Auditor Give Undertaking In Annexure III From The Stating Compliances Of Regulation 292E Of SEBI (ICDR) Regulations, 2018, Information In Respect Of The Annual Spending And About The Funding Of The Past FY Of The Entity.

Firstly, there is the same registration process for NSE SSE and BSE SSE by NPO. However, on BSE SSE, we can check our eligibility by filling out the Yes or No question and answers. If you are eligible and give the right answers as per the eligibility criteria, then successful word mention on screen and then register your interest, but on NSE SSE, we need to create a login credential, then we can fill out the application form, and fees are very minimal as per the circular, but we have not been notified yet. On BSE SSE, the process is a little bit easier as compared to NSE SSE.

Generally, the Exchange reverts to the Issuer with the queries/approval on the application within T+5 working days from the receipt of the application which is correct and complete in all respects. However, additional days may be required on case-to-case basis.

Satisfactory response to the queries raised by the exchange shall be submitted on immediate basis which in any way shall not be later than one month from the last requirement raised. Exchange reserves the right to return the applications if not responded satisfactorily within one month. The fees for registering on a SSE can vary depending on specific exchange and SEBI has not notified a separate fee structure for Social Stock Exchanges as of yet.

Note: The documents to be submitted for registration of an NPO are required to be submitted by CEO/Managing Trustee/Statutory Auditor/any authorized signatories from governing body.

There are the different kinds of instruments through which funds can be raised by an NPO on an SSE:

Zero Coupon Zero Principal Instruments

Donation Through Mutual Funds Schemes

Development Impact Bonds

There are the different types of the investors who might invest through SSE.

Only institutional and NPOs from India can invest in not for profit entities. Non institutional investors Companies, family run foundations/trusts and HNIs are qualified to invest in the SSE as non-institutional investors. This means that all philanthropic donors such as Tata Trust, Azim Premji Foundation, Wipro Foundation, Individuals (who will invest more than INR 2 lakhs) and Corporates with CSR obligations would be allowed to make social investments through the SSE.

Conclusion: If NPO want to access the market and explore more for funding, then register on SSE, which can be BSE or NSE. Both have the same registration process, but BSE is a more easy and valuable process that can be easily understood by giving the questions and answers to the eligibility criteria. There is the mandatory registration process for NPOs and providing accurate documents as per above.

DISCLAIMER: The information provided in this article is intended for general informational purposes only and is based on the latest guidelines and regulations. While we strive to ensure the accuracy and completeness of the information, it may not reflect the most current legal or regulatory changes. Taxpayers are advised to consult with a qualified tax professional or you may contact to our tax advisor team through call +91-9871990888 or info@semantictaxgen.in.

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Introduction to Social Stock Exchange

Investors’ awareness of the Social Stock Exchange SEBI was first set up as a non statutory body on April 12, 1988 with the objectives of investor protection and market development and regulation of securities markets. Indeed, in July 2019 the Indian Finance Minister, Smt Nirmala Sitharaman came up with the idea of Social Stock Exchange (SSE) aimed at promoting both not-for profit and for profit social enterprises. Targeted as a portion of the already established stock markets like NSE or BSE, this SSE will assist social enterprises to secure capital from the public and will be calibrated at organizations that strive to build social impact.

Regulatory Framework The framework has been spelt out by SEBI under the provisions of ICDR, LODR and AIF for the SSE. This way, the SSE can support the social enterprises’ goals of bringing about inclusive growth and ensuring financial inclusion by allowing organizations to issue equity, debt, or units resembling mutual funds.

Impact of COVID-19 This paper examines general factors in operation risk management in capital markets, especially concerning the pandemic triggered by the outbreak of the coronavirus in 2020. The SSE’s goal is to reduce the economic impact of the pandemic by mobilizing social capital to restore the lives and combat pandemic issues. It also creates awareness to people across the globe on sustainability, assisting in aligning the SDGs with the early ESG priorities.

SEBI Amendments SEBI proposes to amend the ICDR and LODR regulations to:SEBI proposes to amend the ICDR and LODR regulations to:

Enable cost accountants and their firms who are accredited with the National Institute of Securities Markets to work as social auditors and report the entity’s positive effects to the society once in every year. On the same note, there is a need to ensure the following considerations Inclusion of cost accountants in the Social Stock Exchange Governing Council. At present, the audits and the reports for the SSE must only be handled by those who are enlisted with the Institute of Chartered Accountants of India or any other comparable agency. The changes proposed were to incorporate these roles for statutory cost auditors, independent cost accountant and their firms which have a valid certificate.

Applicability The SSE is applicable to:

Nonprofit or, to a lesser extent, “mission-based” ventures, in the fields of goods and services production and delivery. Professionals qualified in accordance with the provisions of the statutes of that state and the act or firms qualified as independent cost accountants.

Conclusion The Social Stock Exchange in India is another level of improvement in controlled and clear method of mobilizing funds for social issues. It offers a legal framework for social entrepreneurship to the extent of widening the concept of philanthropy with an additional close watch on the spending capacities of such organizations for positive and efficient change.