Legal Framework of NGOs in India

Non-Governmental Organisations (NGO) do not exist for a profit motive. These organisations do the work which ought to have been done by the government. The purpose and intent of these organisations is not to work with any profit motive and hence are also known as Non-Profit Organisations(NPO). However, they may have some profit-making activity provided any income or surplus is applied for charitable purposes.

The registration and administration of NGOs/NPOs is a concurrent subject under the 7th Schedule, List III, Item 28, of the Constitution of India, which means that both Central and State Government are competent to legislate on this subject. Currently, the registration and regulation of NGOs/NPOs  is a state subject.

The most popular form of registering an NGOs/NPOs is registration as a society. The registration of a society is regulated as per the laws enacted by the respective states. NGOs/NPOs can also be registered as a trust or a company.It may be noted that for registering a trust there is no specific law in the country.

All public trusts are registered under the Registration Act, 1908.The Companies Act, 2013 is the only Central Statute under which NGOs/NPOs canbe registered as a company. However, registering an NGOs/NPOs as a company isnot very popular and can be difficult for small and remote NGOs/NPOs.

The primary statutes of registration are as under:

  • Registration of Societies Act, 1860;
  • Companies Act, 2013.

In India, trusts are not registered with any particular authority except in some states like Maharashtra, Rajasthan etc. In fact, the Trust Deed is registered under the Registration Act, 1908. The Indian Trusts Act, 1882 is applicable to private trusts but is used as a reference statute for public charitable trusts also.


Any person or entity has the right to carry on development work even without any formal registration. However, all voluntary organisations must get themselves legally registered. Some benefits of getting an organisation registered are as under:

  • Properties can be lawfully vested in the name of the organisation.
  • Bank accounts can be opened in the name of the organisation.
  • It becomes a legal entity that can sue and be sued.
  • It provides greater credibility in sourcing funds as well as implementing programmes.
  • It can have sustained longevity, independent of its founders.
  • The liability of the members generally becomes limited except in the case of trust where the liability of the trustees is unlimited.
  • It can be registered under the Income-tax Act, Foreign Contribution Regulation Act and various other legal authorities.


All registered NPOs may require subsequent registration and compliancesunder various other statutes of the land for various purposes. Some important statutes which apply to the NGOs/NPOs are as under:

  • Registration under the Income-tax Act, 1961 to avail exemptions from Income-tax. Such registration is normally done under section 12 AB of the Act. There are various other sections under which exemptions can be availed by various types of NGOs/NPOs.
  • Registration under Foreign Contribution (Regulation) Act, 2010(FCRA) in order to receive grants from foreign sources.
  • Approval under section 80 G of the Income-tax Act, 1961 by virtue of which the donor can get the benefit of deduction in respect of donation under income-tax.
  • Registration/approval from Reserve Bank of India for foreign NGOs/NPOs to work in India under the Foreign Exchange Management Act.
  • NGOs/NPOs may also have to register or comply with various other statute depending on the specific applicability depending on case to case basis. Some of such compliances would be as under:
  • Applicability of provident fund and gratuity laws if the number of employees exceeds 20 and 10 respectively.
  • Applicability of Goods and Services Tax Act if taxable services above the exempted limit are provided or any applicable activity is conducted.
  • Permission from a specific Ministry if an international activity is conducted in India etc.


Dr. Deepak Miglani, Email id.:- [email protected]

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