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2009 January 26 [Monday]

republic@60

As the Indian republic turns 60, it also ironically marks the second month-versary of the Mumbai attacks on 26 Nov last year. There was the initial outrage, brouhaha, etc.. for about a month ; then the dust began settling on the terrorism issue. Not surprising at all since the Indian media had jucier bytes to beam like the Satyam financial fraud issue, the Obama's oath ceremony and who can forget the desi stylists falling over themselves to comment on Ms.Obama's fashion sense.

When the attack occured 2 months ago, our politicians went into a tizzy in the ensuing media frenzy and gleefully gave media sound bytes bordering on hyperbole. The ex-CM of the Mahanarashtra state and his actor son took a film producer/director to the Taj hotel so he could get a first hand look at the terrorist's killing and carnage and faithfully reproduce an exaggerated over-hyped masala film with some sexy dance/item numbers thrown in for the masses.

Even the Dalai Lama called a spade a spade instead of pussy-footing like most others or hiding behind diplomasque. With politicians like the minister Antulay, who in Paliament indirectly suggested that the terrorists may not be from Pakistan but may be Hindus, India does'nt need enemies.  Despite Ajmal Amir (he also has a wikipedia page *eye-roll*) revealing that they attacked Mumbai to avenge the Mid-East/Israel gridlock, David Milliband manages to put his foot in his mouth with some faulty logic.  Since access to the USA is harder for Al-quaida, the ocean not withstanding, it makes strategic sense for Islamic jihadists to kill/strike at US citizens outside the USA in other countries like Mumbai and other parts of India, the probability of which is scarily plausible in the face of the ISI training women in terrorism tactics and not just poor Ajmal Amir's who want to become famous for all the wrong reason. Besides the geographical advantage, India is has amazingly high levels of corruption and scores of idiots who are inefficient and inept when it comes to delivering justice and clamping down on criminal activities. No really, you can get away with murder in India, literally !

Is Pakistan a terrorist state?? Not according to ex-Gen.Mussharraf who has a good sense of humor when he berates the USA (Obama government ?) thus :

"If you compare what you spent in Afghanistan, I believe I read an article where roughly 143 billion dollars have been spent in Afghanistan. What have you spent in Iraq? Maybe over a trillion dollars?"

Now that sounds like a subtle blackmail toned as whining for economic aid. Hmpf, so Pakistan is essentially telling the US and the world to "pony up the $$$ and then FO". Indirectly he just showed USA the middle finger as the $$$ will be used to create Al-queda sancturies.

Obama did not take kindly to being shown the middle finger but its too early in the game as Pakistan has always been good with international diplomacy while the Indian governtment fails abjectly on that front. They even managed to get China, (a communist country with abject human rights situation...Tibet anyone?) on their side by giving them carte blanche power to “sort out” this diplomatic tangle. Duh, now how did that happen ??

Pakistan managed to steal the limelight thanks to the jingoism our politicians indulged in, the sound bytes about how India reserves all right to wage war. A heir-in-waiting, Rahul Gandhi, is busy scoring brownie points with a morality spiel on how Indians only respect people who have money, authority and positions...err, how about giving up that Z+ security and Lyuten's bungalow for starters, Mr.Gandhi !?

Other ministers, including the Prime minister, did nothing beyond condemning the act vehemently as "outrageous" and engaged in empty rhetoric's. Although India had all the evidence in the form of : records of telephone conversation that took place between terrorist at Mumbai and coordinators in Pakistan ; written statements from the arrested terrorist ; his parents admission and identification that he is their son ; confirmation by international intelligence agencies (including US, UK, etc) ; captured weapons used by the terrorists with markings of ordinance factories located in Pakistan ; etc..... it appears that our external affairs ministry as usual failed to present the available evidence effectively ; to Pakistan Government as well as to international community. It is indeed pathetic to note that we are still sloppy in preparing our case sheet and are struggling to ensure 'to fix the offence committed on the offender without leaving any loophole'.

Amidst all this media drama, Pakistan was smart enough to deflect attention and play the victim while our government babus patted themselves on the back for the perfect media pitch, empty threats and sabre rattling, which only annoyed a lot of countries (including China the epitome of democracy). Red-herring's like "joint probes" and tangential unrelated issues like the Malegaon blasts and other diversionary tactics helped them subvert and play the innocent victim to good effect, leaving India foaming at the mouth. By the time the police and other criminal investigation agencies compile evidence to prepare the FIR, years would pass affecting the resolve and anger of the International community to punish Pakistan for promoting terrorism on its soil.

That is the crossroads India stands at on this 60th Republic day and its ironic that Netaji was choosen the youth icon on the occassion of his birthday last week. with politicians gleefully going the whole media hog over his janmashtami BUT yet every successive Indian government has always maintained a mysterious and deafening silence on Bose's death. Even his daughter thought we didnt do enough to remember her father. Hmm... maybe Dhar's book reveal the unknown mystery behind the PMO office destroying documents.  India may be a democratic state turning 60 which is a second coming of sorts, but frankly unless we pull up our socks and develop zero-tolerance to *corruption* we will not reach our full potential.

2008 December 12 [Friday]

Registering a NPO in India

Many many many moons ago I got a low down on registering non-profits (NPO) in India (thanks Kallol :)) but I took a few months to blog about it so thanks for the strong poke :) 

NON-PROFIT ORGANISATIONS in India

There are 3 kinds of Non-Profit organizations that can be setup : a trust, a society or a section 25 company.


1. Trusts:

A trust can take donations and is meant for charitable purposes. Validity extends only in original state it was registered in. Example: If the NPO was registered in Karnataka state it is exempt from I-Tax only there and 80G is applicable.

TAX : Donations and any other form of income (membership, registration fees, sponsorships) in trusts are exempt from income taxes.

REG Cost (as of 2008) : Around INR.5000 to register and in Bangalore, the registrar of societies office is on Church street.



2. Society (or association)

Not very different from a Trust but a Society (or association as it is sometimes called) has a little more scope with a slightly open organisational structure. A society cannot have chapters (branches) outside Karnataka, although members could be from anywhere in India.

If it is registered in Karnataka state it is exempt from ITax there. It needs 7 members including 4 office bearers (chairman, vc, treasurer, secretary) and all of them must be from the state where the society is registered.  Annual meetings : treasurer prepares all the accounts year ending and get them signed by the secretary and the chairman and vice chairman and the secretary files them.

TAX : Service tax on sponsorships. Membership income is tax free (including service tax). 80G again requires the accountant. Donations and any other form of income (membership, registration fees, sponsorships) in trusts are exempt from income taxes.

REG Cost (as of 2008) : Takes 14 days to register and costs around INR5000 to register the same. In Bangalore the registrar of societies office is on Church Street.


3. A section 25 company :

Sec25 companies are different from a Trust and Society in every way. Some salient features ::

  • Sec25 can be registerd as a private or public limited company and the difference is in the number of minimum directors the company needs to have.
  • If the sec 25 company is private limited, then 2 directors are required, otherwise, 3 or 5 are required.
  • Directors can be from anywhere in india
  • Its different from normal companies, as in, that they can not distribute dividend to promoters/founders.
  • Exempt from ITax.
  • One time Pan-India registration.
  • The difference between a Society and Sec 25 is that the latter can enter into contract with any national or international institution. For example : a Sec25 NPO can sign a MoU with another organisation/firm/company
  • It need not be registered in every state and like a society its recognised all over the country, but for it to enter into a contract with another organisation that is outside the state it is registered, it need needs to be registered in that state as well.
  • It can have branches anywhere in India and have people working part / full time as regular employees.
  • Annual meetings : Regular AGM (annual general meeting) like all corporates do But the AGM requires quorum (members to be present or be represented by proxies) and annual returns and IT returns are filed by the accountants/company secretary. This depends on the MoA (memorandum of association) which will contain these details.
  • Donations and any other form of income (membership, registration fees, sponsorships) for sec 25 companies needs a separate application to the IT dept to get tax exemption. Sponsorship income attracts service tax everywhere. {HINT: Add service tax to sponsorship fee and invoice sponsors including taxes.}

REG Cost (as of 2008) : INR.15,000 + small expenses. Requires 2 months to register including a visit to the Regional Director's office in Chennai (if you are in South India).

GENERAL NOTES :

  • Although Trusts, Societies and Sec 25 companies are pan-India NP bodies, only a sec25 company can sign contracts with bodies outside the state. Societies and Trusts have limitations in this regard.
  • Members of a non-profit are not assessable or liable for taxes for income raising out of the organisation's activities. It applies to trusts, societies and sec 25 companies.
  • Even if the not-profit does not have any annual income, it WILL need to file a IT-return. The return will simply put income as 'zero'. For activities in the adhoc period of operation, one can lump it as 'pre-operative expenses' and include it in the books when the not-profit is formed.


Below is a comparison chart for the main differences between a trust, a society and a section 25 company


 

Public Trust

Society

Section 25 Company

Statute/ Legislation

Public Trust Act like Bombay Public Trusts Act of 1950

Societies Registration Act of 1860

Companies Act of 1956

Jurisdiction of the Act

Concerned State where registered

Concerned State where registered

Concerned State where registered

Authority

Charity Commissioner

Registrar of Societies

Registrar of Companies

Registration

As Trust

As society (and by default also as  Trust in Maharashtra & Gujarat)

As Section - 25 company  

Main Document

Trust deed

Memorandum of Associations and Rules & Regulations

Memorandum and Articles of Association

Stamp Duty

Trust deed to be executed on non-judicial stamp paper of prescribed value

No stamp paper required for Memorandum of Associations and Rules & Regulations

No stamp paper required for Memorandum and Articles of Association

Number of persons needed to register

Minimum two trustees; no upper limit

Minimum seven; no upper limit

Minimum seven; no upper limit

Board of Management

Trustees

Governing body or council/managing or executive committee

Board of Directors/Managing Committee

Mode of succession on board of management

Usually by appointment

Usually election by members of the general body

Usually election by members of the general body

Source:  Mathew Cherian, Director CAF India, New Delhi (Source : Internet)


2008 September 23 [Tuesday]

IndiaInc.

Is India, increasingly portrayed as the fastest growing economy in Asia, the best place to do business with ??! What is the ground reality for a business (it could be a startup in the manufacturing industry) when a CEO is murdered in broad daylight, abetted by an inactive police. Instead of booking the murdering criminals the labour minister warns the industry ...for what ... conducting business and generating employment?? Maybe the negative impact on foreign investment will pass the message across in future. Sadly, this too will be forgotten after a few days when the media finds another juicer piece of news.

If the ministers reaction is intended to provide more spark by indirectly telling people to take law into their own hands, it works very well. What would they have done if an Indian newspaper had advertised Mandela, DalaiLama and Gandhi (will someone tell Jyllandsposten its not spelt as Ghandi) like the Nordic Jyllandsposten did??  Salil Tripathi opines that these Jyllands-Posten " life is easier, if you don’t speak up" ads are intended to send a message across to Muslims across the world that if Indians, Tibetians and South Africans around the world are not offended by the posters then they should not take law into their own hands.

My guess is that there will be Indian people who will find offence with those posters because its so easy to overlook the philosophy like satyagraha, truth, no corruption or ahimsa, which Gandhi (recycled from the older B.Gita and Upanishads) propagated than deal with mundane issues like poverty and terrorism. Today, dont be too surprised to see Gandhi benignly smiling at you from the portrait on the wall he is hung on, in a government office, whilst the employee sitting under the duly garlanded photograph asks you for bakshish/chai pani (== bribe).... Welcome to modern India!!

The movie, Gandhi - My Father explores Gandhi’s role within his family and Akshay Khanna (would love to see AK pair up with Aamir Khan in the play Mee Nathuram Godse boltoy which is N.Godse's perspective on why he did what he did) brought to life what we had never learnt in school or wrote in examination answer sheets but always knew, the humane side of Gandhi -- the spectacular failure he was as a father whilst being hailed as India's Father (Bapu). How ironical and yet he has morals and a strong character and many qualities worth emulating, which are (sadly) completely absent in modern politicians.