Registering an NGO happens in two stages: first you choose and register a legal structure (a Section 8 company, a charitable trust, or a society), then you build the funding stack that decides what money you can legally receive. This guide walks through both, so you set up in a way that funders will actually support.
Step one: choose your structure
There are three common NGO structures in India, and the choice affects credibility and compliance:
- Section 8 company: incorporated with the MCA, the most credible structure for CSR funders and institutions because it carries full corporate governance. More compliance, more trust.
- Charitable trust: created by a trust deed registered with the local sub-registrar. Simplest and quickest to set up.
- Society: registered with the state Registrar of Societies, needing at least seven members. Sits between the other two.
Step two: get your NGO Darpan ID
The NGO Darpan ID on NITI Aayog portal is free and has become the base layer of NGO compliance. It is required for government grants, a prerequisite for FCRA, and increasingly requested by banks for NGO accounts. Get this early, because other registrations depend on it.
Step three: 12A and 80G
Section 12A exempts the NGO own income from tax, and 80G lets your donors claim a deduction, which materially improves fundraising conversations. Both are applied online through the income tax portal, initially as provisional registrations. Without 12A, your surplus is taxed like business income.
Step four: CSR-1 for corporate funding
If you want to receive CSR money from companies, file CSR-1 on the MCA portal, which registers your NGO as eligible. Corporates cannot route CSR funds to an unregistered entity. You need 12A and 80G in place first.
Step five: FCRA for foreign donations
To receive foreign contributions legally, you need FCRA registration or prior permission. Full registration generally requires three years of activity and minimum spending on your objects; newer NGOs seek prior permission for a specific grant. Funds must flow into the designated FCRA account, and annual returns are mandatory. Receiving foreign money without it is a serious offence, so plan this early.
Common mistakes to avoid
- Choosing a trust for speed when you plan to raise large CSR or institutional funds, where Section 8 carries more weight.
- Skipping the Darpan ID, which blocks grants and FCRA later.
- Fundraising before 12A and 80G are in place, leaving surplus taxable and donors without deductions.
- Accepting foreign donations before FCRA registration or prior permission.
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