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What is Commencement of Business Certificate and form INC 20A?
All you need to know
The newly rolled out and most discussed among the corporate is Form INC-20A. Those Companies registered in India after the commencement of the Companies (Amendment) Ordinance, 2018 and having share capital is required to obtain commencement of business certificate before commencing any business or exercising any borrowing powers. One can say that the Ministry has reintroduced the concept of Commencement of Business Certificate via Form INC-20A on MCA.
On 2nd of November, 2018 the Companies (Amendment) Ordinance 2018 was introduced, hence any company incorporated after this date will be required to file Form INC-20A. Such companies are required to obtain the certificate within 180 days of incorporation of the company.
Consequences of non-filing of Form-INC-20A may create hindrance for companies to start their business and also while borrowing of money. The company would be liable to a Penalty for late filing the Form INC-20A if it exceeds 180 days of from the date of incorporation
INC-20A
An NGO & 80G can apply for 12A for tax exception on a surplus fund of the NGO as well can obtain 80G certification for donor’s tax exception.
It is a registration done by NGO to get an organization income exempted from Tax. All income shall not be taxable after 12A registration. If NGO does not get 12A registration, income tax is payable on surplus during the year.
ADVANTAGES
UNDER SECTION 12A
- Income will be exempted from taxation.
- Benefits of taking grants from Government, Abroad, other agencies.
- Benefits of FCRA Registration.
- The donor can avail deduction from its taxable income.
- Attracts the donor to make a donation.
DOCUMENTS
UNDER SECTION 12A
- List of name, address and Pan details of the trustees/managers;
- Certified true copy of the instrument(registration certificate) under which the trust/institution was created/established;
- Certified true copy of the document (Trust deed/MOA and AOA) which is evidence of such institution/trust creation;
- Copy of PAN card of NGO.
UNDER SECTION 80G
- Registration Certificate and MOA /Trust Deed
- NOC from Landlord (where registered office is situated)
- Copy of PAN card of NGOv
- Copy of Electricity Bill / House tax Receipt /Water Bill
- Evidence of welfare activities carried out & Progress Report since inception or last 3 years
- The statement of accounts, Balance Sheet since inception or last 3years
- List of donors along with their address and PAN
- List of governing body board of trustees members with their contact details
- Copy of registration granted under section 12A or copy of notification issued under section 10(23)or section 10(23C)
ELIGIBILITY
UNDER SECTION 12A
Charitable Trusts, Religious Trusts, Societies and Section 8 Companies Not applicable to the Private or family Trust.
UNDER SECTION 80G
Donation made to charities prescribed under category 80G.
The NGO shall be duly registered under the Act.
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