{"id":3179,"date":"2020-06-23T17:34:30","date_gmt":"2020-06-23T17:34:30","guid":{"rendered":"https:\/\/lexforti.com\/legal-news\/?p=3179"},"modified":"2021-01-17T06:02:30","modified_gmt":"2021-01-17T06:02:30","slug":"tax-benefits-for-a-nonprofit-entity","status":"publish","type":"post","link":"https:\/\/lexforti.com\/legal-news\/tax-benefits-for-a-nonprofit-entity\/","title":{"rendered":"Tax Benefits for a Nonprofit Entity"},"content":{"rendered":"\n<p><strong>Kalpana Borjha | Kalinga University | 23rd June 2020\u00a0<\/strong><\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_47_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"ez-toc-toggle-icon-1\"><label for=\"item-6a2231c0c42a3\" aria-label=\"Table of Content\"><span style=\"display: flex;align-items: center;width: 35px;height: 30px;justify-content: center;direction:ltr;\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/label><input  type=\"checkbox\" id=\"item-6a2231c0c42a3\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/lexforti.com\/legal-news\/tax-benefits-for-a-nonprofit-entity\/#Introduction\" title=\"Introduction\">Introduction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/lexforti.com\/legal-news\/tax-benefits-for-a-nonprofit-entity\/#Indian_Law_Provisions_related_to_NPOs\" title=\"Indian Law Provisions related to NPOs:\">Indian Law Provisions related to NPOs:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/lexforti.com\/legal-news\/tax-benefits-for-a-nonprofit-entity\/#Advantages_for_Non-Profit_Organization\" title=\"Advantages for Non-Profit Organization:\">Advantages for Non-Profit Organization:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/lexforti.com\/legal-news\/tax-benefits-for-a-nonprofit-entity\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Introduction\"><\/span><strong>Introduction<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-text-align-justify\">Non-profit organization is an organization which indulges in public and private interest without the goal of monetary profits or commercial benefits. Such organizations need to get qualified under the <strong>Internal Revenue Code 501(c)(3)<\/strong>. Once an organization is exempted from this tax, it gets exempted from other such state and local taxes. It is a legal entity and is separate from the founder of the organization. The founder\/owner puts the charitable mission and structure before his\/her personal interest. An organization must be operated exclusively for religious acts, charitable acts or public safety purposes, or should collect and turn over the money to charitable organizations. A non-profit organization must be registered to gain tax benefits and official recognition by the Government. Registration can be done in 4 ways- by trust, by society, by <strong>section 8 of Companies Act,<\/strong> or by special licensing. It can be done through the Registrar of Societies (RoS) or Registrar of Companies (RoC).<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Indian_Law_Provisions_related_to_NPOs\"><\/span><strong>Indian Law Provisions related to NPOs:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ul><li><strong>Article 19<\/strong> and <strong>Article 30<\/strong> of the Indian Constitution.<\/li><li>Societies Registration Act, 1860.<\/li><li>Income Tax Act, 1961.<\/li><li>Public Trust Acts (of States)<\/li><li>Section 8 of the Companies Act, 2013.<\/li><li>Foreign Contribution (Regulation) Act, 1976.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advantages_for_Non-Profit_Organization\"><\/span><strong>Advantages for Non-Profit Organization:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ul><li>Non-Profit Organizations are exempted from paying sales tax and property taxes.<\/li><li>The income of a non-profit organization is not subject to Employee Taxes (Social, Security, and Medicare) as that for any profitable organization or company.<\/li><li>Non-profit organizations can also offer individuals and businesses for a tax deduction by asking contributing them to contribute for charitable purposes.<\/li><li>A Non-profit organization has the right to exist in perpetuity whereas an informal organization does not have that.<\/li><li>Apart from the federal tax, non-profit organizations are also exempted from paying the state tax and local taxes.<\/li><li>The founder, employee, or any person related to a non-profit organization is not personally liable for the debts of the organization. The creditor and courts are limited to the assets of such an organization.<\/li><li>The working of Non-profit organizations is transparent, i.e., they may get a copy of salaries and expenditure of non-profit organizations and are free to inspect.<\/li><li>Sometimes such organizations are provided with tax credit by the government (federal as well as state government) and some private institutions. The tax credit denotes the amount it owes as tax for the particular term or year.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-text-align-justify\">Although non-profit organizations are exempted from taxes, they must submit the necessary paper-work and documents such as annual filings to the state and Internal Revenue Code within the deadline, to keep the organization active and exempt from taxes. A non-profit organization may be taxed for engaging in certain activities that are unrelated to its basic functions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kalpana Borjha | Kalinga University | 23rd June 2020\u00a0 Introduction Non-profit organization is an organization which indulges in public and private interest without the goal of monetary profits or commercial benefits. Such organizations need to get qualified under the Internal Revenue Code 501(c)(3). Once an organization is exempted from this tax, it gets exempted from [&hellip;]<\/p>\n","protected":false},"author":167,"featured_media":2952,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[100,34,1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.8.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Tax Benefits for a Nonprofit Entity - LexForti<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/lexforti.com\/legal-news\/tax-benefits-for-a-nonprofit-entity\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tax Benefits for a Nonprofit Entity - LexForti\" \/>\n<meta property=\"og:description\" content=\"Kalpana Borjha | Kalinga University | 23rd June 2020\u00a0 Introduction Non-profit organization is an organization which indulges in public and private interest without the goal of monetary profits or commercial benefits. 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