NGO's in India

Charity and Public Utility purpose of NGO’s

What is a charitable purpose under which you can register a Charitable NGO ?

Charitable purposes can be classified under four heads-

a) relief to the poor

b) education

c) medical relief, and

d) any other object of general public utility.

ngo charity india

The ‘raising of moral, intellectual, economic and social and political conditions of people’ is a charitable purpose being the advancement of an object of general public utility.

Relief to the poor: It is not essential that to be considered charitable, the service should be provided free or for less than the cost. An eleemosynary element is not essential nor is it necessary that the benefit be confined to the poor at the entire exclusion of the rich. [Goodman v. Mayor of Salfash (1889) 7 AC 633].

Education: But coaching classes run on pure commercial principle would not qualify for exemption as educational institution as they are not for a charitable purpose. (Bihar Institute of Mining and Mine Surveying v. CIT, 208 ITR 608 (Pat).

Medical Relief: Medical relief by way of establishing & running hospital or other medical institutions is a charitable purpose. On the same lines as ‘relief of the poor’, ‘medical relief’ also does not necessarily mean only the provision of free treatment or treatment on a concessional basis. A hospital or other medical institution may be considered as established for charitable purposes if, in order to provide itself with revenue for its maintenance, it runs special wards for the patients who pay the full price, over and above the voluntary donations and subscriptions it receives. [IRCv. Peebleshire 11 TC 335, 350]

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