1. Mandatory PAN and Income Tax Return Filing

• Yes, all Section 8 companies are mandatorily required to obtain a PAN (Permanent Account Number) under the Income Tax Act, 1961.
  
• They must file an income tax return (ITR-7) annually, regardless of income level.
  
• This applies even if the company has no taxable income or operates entirely on donations.
  
• Non-filing may result in penalties or cancellation of registration.
  
• Filing ensures transparency and legal compliance.
  

2. Registration under Section 12AB for Tax Exemption

• To avail of income tax exemption, Section 8 companies must register under Section 12AB of the Income Tax Act.
  
• This registration recognizes the entity as a charitable or religious institution.
  
• Without it, any surplus income will be treated as taxable income.
  
• Registration must be obtained within 12 months of incorporation or before seeking exemption.
  
• It requires application in Form 10A or Form 10AB through the income tax portal.
  

3. 80G Registration for Donor Tax Benefits

• For donors to claim tax deductions, the company must obtain 80G registration from the Income Tax Department.
  
• This allows donors to claim 50% or 100% deductions on the donation amount.
  
• A separate application must be made along with documentation of charitable activities.
  
• The benefit enhances the credibility and fundraising capacity of the company.
  
• Companies must issue valid 80G receipts to donors for them to claim deductions.
  

4. Timely Compliance to Retain Tax Benefits

• Registrations under 12AB and 80G are now valid for a limited period and must be renewed periodically.
  
• Renewal is required every 5 years to maintain tax-exempt status.
  
• Companies must submit activity reports, audited financials, and utilization records.
  
• Any deviation from objectives or fund misuse can lead to cancellation.
  
• The Income Tax Department reserves the right to review or revoke approvals.
  

5. Other Tax-related Responsibilities

• If a Section 8 company earns business income, it must maintain separate books and segregate charitable and commercial revenue.
  
• They must deduct and deposit TDS (Tax Deducted at Source) where applicable.
  
• GST registration may also be required based on the nature and scale of activities.
  
• They must comply with Form 10B audit requirements if total income exceeds the prescribed limits.
  
• Proper tax registration and compliance safeguard the legal and financial standing of the company.