Running a non-profit organisation in India comes with its own set of responsibilities, especially when structured as a Section 8 Company. While these entities enjoy several regulatory exemptions and benefits, they must also meet a range of compliance obligations to retain their special status and continue operations without legal hurdles.
This comprehensive guide walks you through everything you need about Section 8 Company compliance, from legal, tax, and regulatory requirements to timelines and forms.
Table of Contents
What is a Section 8 Company?
A Section 8 Company is a special category of non-profit organisation registered under Section 8 of the Companies Act, 2013. These companies are formed for charitable or social purposes such as:
- Education
- Promotion of arts and culture
- Social welfare
- Research
- Environmental protection
- Sports development
Key Characteristics:
- No profit distribution: Profits, if any, are reinvested in promoting the organisation’s objectives.
- Name exemption: They do not use “Limited” or “Private Limited” in their names.
- Regulatory advantages: Enjoy exemptions on stamp duty, income tax (if 12A/80G registered), and some ROC compliances.
Related Read: What is ROC Filing & Why It’s Necessary?
Section 8 Companies differ from regular for-profit businesses in that their core purpose is impact, not income, which doesn’t make compliance any less important.
Section 8 Company Compliance
Maintaining compliance is not just about ticking legal boxes—it’s essential to retain the company’s non-profit status, ensure transparency, and stay eligible for grants, tax benefits, and government support.
Types of Compliance:
- Time-Based Compliance
Based on fixed deadlines (e.g., annual returns, AGMs) - Event-Based Compliance
Triggered by corporate actions (e.g., change of directors, share allotment) - Criteria-Based Compliance
Based on financial thresholds or specific business conditions (e.g., GST annual returns if turnover exceeds ₹2 crore)
A. Compliance Requirements Under the Companies Act, 2013 (and Related Rules)
Here’s a breakdown of key compliances that every Section 8 Company must fulfil:
| Compliance event | Form/ Action | Due date/ Timeline |
|---|---|---|
| Registered office verification | INC-22 | Within 30 days of incorporation |
| Appointment of auditor | ADT-1 | Within 15 days of the AGM or 30 days of incorporation |
| Disclosure of directors’ interest | MBP-1 | First Board Meeting of the financial year |
| Intimation of disqualification | DIR-8 | Annually before reappointment |
| Annual General Meeting (AGM) | Mandatory AGM | Within 6 months from the end of the financial year |
| Board Meetings | Minimum 2 per year | At least once every 6 months |
| Financial statements | AOC 4 | Within 30 days of the AGM |
| Annual return | MGT-7 | Within 60 days of the AGM |
| Director KYC | DIR-3 KYC | Annually by 30th September |
| Share allotment (if applicable) | PAS-3 | Within 15 days of the allotment |
Planning to start a non-profit? Begin your Section 8 Company registration with expert assistance today.
B. Compliance Obligations Under FEMA Regulations
If your Section 8 Company receives foreign investments or donations, FEMA compliance becomes mandatory.
| Requirement | Form | Timeline |
|---|---|---|
| Reporting foreign allotment | FC-GPR (via RBI’s SMF portal) | Within 30 days of share allotment |
| Annual return on foreign assets/liabilities | FLA Return (via RBI FLAIR system) | By 15th July each year |
C. GST Compliance as per the Goods and Services Tax Act, 2017
Section 8 Companies may need GST registration if their annual turnover exceeds the prescribed limits or if they engage in taxable activities.
Thresholds:
₹20 lakh (services) or ₹40 lakh (goods) for most states
Monthly/Quarterly Returns:
| Form | Purpose | Frequency | Due Date |
|---|---|---|---|
| GSTR-1 | Outward supplies | Monthly/Quarterly | 11th of next month |
| GSTR-3B | Summary return | Monthly | 20th of next month |
| IFF (Invoice Furnishing Facility) | For quarterly filers under QRMP | Monthly (optional) | 13th of the month after |
Annual Returns (If applicable based on turnover):
| Forn | Applicable to | Due Date |
|---|---|---|
| GSTR-9 | Turnover > ₹2 crore | 31st December |
| GSTR-9C | Turnover > ₹5 crore (audit) | 31st December |
D. Income Tax Compliance Under the Income Tax Act, 1961
While many Section 8 companies register under 12A and 80G to claim income tax exemptions, they must still follow standard tax compliances.
| Compliance | Form | Due Date |
|---|---|---|
| Tax payments (advance tax, if applicable) | ITNS-280 | Quarterly |
| TDS payments | ITNS-281 | 7th of next month |
| TDS returns | 24Q, 26Q | Quarterly (by 31st of July/Oct/Jan/May) |
| Issue of TDS certificates | Form 16/16A | Within 15 days of return filing |
| Tax audit report (if income > ₹1 crore or ₹50 lakh for professionals) | Form 3CA/3CB, 3CD | By 31st October |
| Income tax return | ITR-7 (for charitable organizations) | By 31st October or 30th November (if audited) |
E. Statutory Compliance Under Applicable Labour Laws
Section 8 Companies employing staff are also required to comply with applicable labour laws, such as EPF, ESI, and state-specific welfare fund contributions.
| Compliance | Form / Action | Due Date / Frequency |
|---|---|---|
| Provident Fund (EPF) | ECR (Electronic Challan cum Return) | 15th of each month |
| Employees’ State Insurance (ESI) | Monthly ESI return | 15th of each month |
| Labour Welfare Fund (state-specific) | State-specific forms | Half-yearly / annually |
| Professional Tax (if applicable) | Varies by state | Monthly/quarterly |
Frequently Asked Questions
A Section 8 Company, though nonprofit in nature, must still comply with several regulatory requirements under Indian law to maintain its active status and tax exemptions.
- Registrar of Companies (ROC) Compliance under the Companies Act, 2013
- Income Tax Compliance under the Income Tax Act, 1961
- GST Compliance (if registered under GST)
- FEMA Compliance (if receiving foreign funds/investment)
- Labour Law Compliance (if employing staff)
Here’s a simplified compliance checklist for Section 8 companies:
- ROC Filing
- Board Meetings
- AGM
- Auditor Appointment
- Director Disclosures
- Income Tax Return
- TDS Filing
- GST Returns
- Labour Law (EPF/ESI)
Note: This checklist may vary depending on the size, funding, turnover, and specific activities of the Section 8 company.
Yes, a Section 8 Company can be struck off, but only under specific conditions and with approval from the Regional Director (RD) of the Ministry of Corporate Affairs (MCA).
Sarthak Goyal is a Chartered Accountant with 10+ years of experience in business process consulting, internal audits, risk management, and Virtual CFO services. He cleared his CA at 21, began his career in a PSU, and went on to establish a successful ₹8 Cr+ e-commerce venture.
He has since advised ₹200–1000 Cr+ companies on streamlining operations, setting up audit frameworks, and financial monitoring. A community builder for finance professionals and an amateur writer, Sarthak blends deep finance expertise with an entrepreneurial spirit and a passion for continuous learning.
