Not many changes have been made in Budget 2025 for NGOs, more specifically there are 3 detailed below.
-
Government has liberalized period of registration for small NGOs i.e. those whose income in past 2 years preceding date of application is upto Rs.5 cr. Such NGOs will be registered for 10 years instead of 5 years on renewal and will not have to undergo the pain of renewal every 5 years. For instance, if 5 year NGO registration under 12AB or approval under 80G is valid upto AY 25-26 i.e. 31.3.2025, it needs to apply for12AB/80G renewal before 30.9.2025. If income in FY 24-25 and FY 23-24 is upto Rs. 5 cr, the renewal will be granted for 10 years by the Department after process of inquiry.
-
Government has provided clarification that Incomplete information provided to Income Tax Department will not be a specified violation calling for cancellation of 12AB registration. This step is welcome.
-
The definition of Specified Person under Section 13 which includes among others a person (other than founder, author) making substantial contribution of Rs.50.000/- has been revised to Rs.100,000/- in a year and Rs.10 lakhs in aggregate up the relevant year. This would reduce the reporting requirements for NGOs
