Whether Micro Finance NGO / Society are Taxable in India

Querist : Anonymous (Querist) 06 January 2010 This query is : Resolved
Hi,

Please give me details whether Micro Finance NGO/Society are Taxable under Income Tax Act, 1961, ?

How to Tackle the Problem of Income Tax ?

How to get Exemption ?

Please help.
Thanks
Regards, Bikas C Saha

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soumitra basu (Expert) 06 January 2010
If this is a NGO/Society not for the purpose of profit then you can claim registration under section 12 of the Income Tax. For this purpose you should be registered either Charitable Trust or Registered Society not for the purpose of profit.
If you get registration then your income is exempt from payment of income tax subject to certain conditions.
Please see whether a NGO can do the Micro Finance activity without the permission of RBI.

Vineet (Expert) 08 January 2010
Agree with Mr Basu.

Other way is to register it as a co-operative society and claim deduction u/s 80P of the Income Iax Act. You would certainly need RBI approval for a society involved in Micro Finance activity

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