35 AC - 100% Tax Exemption

Every NGO can avail income tax exemption by getting itself registered and complying with certain other formalities, but such registration doesn't provide any benefit to the persons making donations. The Income Tax Act has certain provisions which offer tax benefits to the "donors". Under Sec 35 AC of Income Tax Act, a donor can receive 100% rebate of Income Tax on any amount of donation. The objective of the said provision is to encourage business organizations and wealthy individuals to contribute more in social and economic welfare of general public. Thus NGOS can raise millions of rupees for approved projects under 35 AC of Income Tax Act leading to mutually beneficial relationship between corporate sector and civil society.
The Central Government has constituted a National Committee to identify projects and schemes to be notified under section 35AC, such committee normally consists of eminent persons. All NGOs are entitled to apply to the National Committee to get its projects or schemes approved.

THE FOLLOWING PROJECTS ARE ELIGIBLE FOR APPROVAL.

• Construction and maintenance of drinking water projects in rural areas and in urban slums, including installation of pump-sets, digging of wells, tube wells and laying of pipes for supply of drinking water.
• Construction of dwelling units for the economically weaker sections.
• Construction of school buildings primarily for children belonging to the economically weaker sections of the society.
• Establishment and running of non-conventional and renewable sources of energy systems.
• Construction and maintenance of bridges, public highways and other roads.
• Any other programme for uplift of the rural poor or the urban slum dwellers, as the National Committee may consider fit for support, like :-

 

1. Promotion of sports
2. Pollution control

• Establishment and running of educational institutions in rural areas, exclusively for women and children up to 12 years of age;
• Establishment and running of hospitals and medical facilities in rural areas, exclusively for women and children up to 12 years of age;

• Establishment and running of crèches and school for the children of workers employed in factories or at building sites;
• Encouraging the production of bacteria induced fertilizers;
• Any programme that promotes road safety, prevention of accidents and traffic awareness;
• Construction of hostel accommodation for women or handicapped individuals or individuals who are of the age of sixty-five years or more;
• Establishment and running of institutions for vocational education and training in rural areas or towns which consist of population of less than 5 lakhs.
• Establishment and running of institutions imparting education in the field of engineering and medicine in rural areas or towns which consist of population of less than 5 lakhs.
• Plantation of softwood on degraded non-forest land.
• Any programme of conservation of natural resources or of a forestation.
• Relief and rehabilitation of handicapped individuals.

WHERE TO APPLY FOR 35 AC

The application for approval by the National Committee should be made to the Secretary, National Committee for Promotion of Social & Economic Welfare, Dept. of Revenue, Govt. of India, North Block, New Delhi - 110001.

DOCUMENTS TO BE ENCLOSED

• Application is to be made in 2 Sets, written either in Hindi or English.
• Name, address and status of applicant, the district/ward circle where assessed/PAN No to be given.
• Audited Balance Sheet, Profit& Loss A/c or Income& Expenditure A/c for the latest year and two preceding years.