Words of Caution For Charitable Societies/Trusts

When managing a charitable society or Trust in India, there are several things to avoid to ensure compliance with legal requirements and to maintain the integrity of the organisation. As a decision maker or a functionary, the following should be borne in mind while dispensing your duties as a responsible member of the charitable society/trust: -

1. Never engage in Political or Religious Activities: Charitable societies are meant to serve public purposes and cannot participate in political activities, campaigns or religious propaganda. Any indulgence in the same may lead to a revocation of their charitable status.

2. Do not indulge in discriminatory practices: Do not engage in discriminatory practices in terms of religion, caste, gender, or other grounds when carrying out charitable activities. This can lead to legal action and damage the society's reputation.

3. Do not misuse society/trust funds: Do not use funds meant for charitable purposes for personal gain or unrelated activities. This includes not diverting donations to non-charitable causes.

4. Never indulge in Tax Evasion: Do not evade taxes or misuse tax exemptions granted under Sections 12A and 80G of the Income Tax Act. Misuse of tax benefits can lead to penalties or cancellation of exemptions.

5. Non-Compliance with Regulatory Requirements: Avoid non-compliance with statutory requirements, such as failing to file annual returns, not maintaining proper accounts, records of donations received, expenses incurred, minutes of meetings, and other important documents, or not adhering to the rules under the Societies Registration Act, 1860 or the Indian Trusts Act, 1882 (as applicable).

6. Not Abiding by the Objectives: Do not deviate from the objectives laid out in the Memorandum of Association or Trust Deed. Activities unrelated to the society's stated purpose may lead to legal issues.

By avoiding these pitfalls, your charitable society/trust can operate smoothly, gain public trust, and remain in compliance with the law in India. Don't hesitate to reach out for any additional questions or guidance.