Introduction
A society is a legal entity registered under the Karnataka Societies Registration Act, 1960, established to promote charitable, social, cultural, educational, or religious objectives. Societies differ from other business entities as they operate for nonprofit purposes. Despite their unique structure, societies must adhere to several statutory compliances to maintain their legal standing and ensure transparent operations.
This document outlines the compliance requirements for societies in Karnataka, including key regulatory obligations and additional compliances applicable to their operations.
Key Features of Societies
1-Purpose
Societies are established for nonprofit objectives, such as education, charity, or public service.
2-Registration
Societies must be registered under the Karnataka Societies Registration Act, 1960, to gain legal recognition.
3-Regulatory Authority
The Registrar of Societies oversees their compliance under the Act.
4-Legal Standing
A registered society becomes a separate legal entity capable of owning property, entering contracts, and suing or being sued.
Compliance Calendar for Societies in Karnataka
Compliance/Form | Description | Due Date | Applicable Regulation |
Audit Report | Submission of audited financial statements by a chartered accountant. | Along with annual return filing | Karnataka Societies Registration Act, 1960 |
Income Tax Return | Filing of income tax returns if the society has taxable income. | As per the Income Tax Act schedule | Income Tax Act, 1961 |
FCRA Return (if applicable) | Filing of foreign contribution report if the society receives foreign donations. | By 31st December annually | Foreign Contribution (Regulation) Act, 2010 |
TDS Filings | Quarterly TDS returns if tax is deducted at source. | 31st July, 31st October, 31st January, and 31st May | Income Tax Act, 1961 |
GST Returns (if applicable) | Filing of GST returns if the society is registered under GST. | GSTR-1 : 11th of the following month GSTR-3B : 20th of the following month | GST Act, 2017 |
PF/ESI Returns (if applicable) | Monthly PF/ESI contributions if applicable to society employees. | By 15th of the following month | Employees' Provident Fund Act, 1952, and ESI Act, 1948 |
Additional Compliance to Consider
A ) Filing of Property Transactions
Reporting acquisition or disposal of property held by the society to the Registrar.
B) Minutes of Meetings
Maintain proper records of all meetings conducted, including the AGM and Board meetings.
C) Renewal of Registration
Periodic renewal of the society’s registration, if required, under the Karnataka Societies Registration Act.
Key Points to Note
1-Audit Requirements
Societies must have their accounts audited by a qualified chartered accountant annually.
2-Foreign Contributions
Societies receiving foreign funds must register under the Foreign Contribution (Regulation) Act (FCRA) and comply with reporting requirements.
3-Maintenance of Records
Societies must maintain proper books of accounts, records of members, and minutes of meetings to ensure compliance and accountability.
4-Penalties for Non-Compliance
Non-compliance with statutory requirements may result in penalties, cancellation of registration, or other legal consequences.
Summary
Societies in Karnataka play a pivotal role in social and economic development. Adherence to statutory and regulatory frameworks ensures operational transparency, legal compliance, and the fulfillment of their nonprofit objectives. Timely compliance with audit requirements, tax filings, and other obligations protects the society’s credibility and fosters trust among stakeholders.
Conclusion
Compliance with statutory requirements is essential for societies in Karnataka to maintain their legal standing and achieve their objectives. By following the outlined compliance calendar and maintaining proper records, societies can operate efficiently, transparently, and sustainably.