CAN I SELL PRODUCT IN EXCHANGE OF DONATION

QUESTION

From- Manish Singh

I want to register a NGO which will raise money and provide tax benefit as per govt rule.

if a person donate money, that amount get returned to that person through some other indirect sources.

For ex- if you donate 10000/- then you will be entitled to get discount of 10000/- if you buy some x brand or y thing in some qty of some value.

Is this possible? and How to register that NGO and under which status

1) Society.

2) Trust.

3) Company.

Amount donated by person will be used in health camp, old home age, education in rural area and to provide help to handicapped people.

Please guide me. I am a professional and want to give some meaning to my life by doing some good work in society.

ANSWER:

Hi Manish Singh,

Thanks for posting your query, please get your answer below:

1. The form of activity you told above i.e.

 " if you donate 10000/- then you will be entitled to get discount of 10000/- if you buy some x brand or y thing in some qty of some value"

 is not a donation form, as it is sale of goods in indirect form. No 80G deduction will be allowed in such a case.  You should take donation for your Charitable Activity and if you want to sell article to raise funds, do it but no 80G deduction can be given for it.

2. You can register NGO in any of the 3 forms, it would depend upon number of members and Area of activity. I would suggest to form a Section 25 company as it has better Rules and Regulations regarding formation and working.

Hope this helps you, please feel free to contact further for any query.