PATTIC

If 12A is rejected, can balance grant funds still be utilised?

  1. If 12A and 80G are rejected and the NGO is in appeal, can it continue to utilise balance funds?
    A 12A registration anchors an NGO's income tax exemption under Sections 11 and 12, and an appeal against a rejection can stretch over several quarters while grant balances sit unspent. Can the organisation keep applying those funds to the original charitable purpose while the appeal is pending? → Read more
  2. Are all statutory benefits applicable to FTEs as well?
    Fixed Term Employees are entitled to parity with permanent staff on hours, wages, and benefits under the SS Code, and become eligible for gratuity after just one year. But can they opt out of EPF or ESIC if they prefer a higher take-home? There are two narrow exceptions worth knowing before you write the next FTE contract. → Read more
  3. Is it beneficial to convert to a Section 8 company limited by guarantee?
    For small Section 8s weighed down by dematerialization costs, is converting to limited by guarantee a good route? What do the conversion steps actually look like. → Read more
  4. Are gratuity provisions applicable to NGOs/non-profit organizations?
    Yes. Under Section 2(29) of the SS Code, an NGO is an "establishment," and the First Schedule triggers gratuity once ten or more employees are on the rolls on any day in the preceding twelve months. The Labour Codes have made this cleaner than it used to be. → Read more
  5. TDS disallowance in Form 10BB: is the tax demand valid if 85% application is still met?
    The 85% application threshold is the core compliance test for charitable exemption, but a TDS lapse picked up in Form 10BB can still trigger a tax demand under Section 40(a)(ia). Does meeting the 85% rule shield the NGO from that demand, or do the two sit in tension? There is also one relief route involving Form 26A worth exploring before any appeal. → Read more

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Best wishes,
Team PATTIC