What is Annual Compliance for a Society?

Annual compliance for a society refers to the mandatory set of rules and tasks that every registered society must follow each year. These legal requirements ensure that the society operates transparently, manages its finances responsibly, and stays aligned with its founding purpose.

Core Annual Compliance Tasks Include:

• Holding regular meetings, especially the Annual General Meeting (AGM)

• Preparing and auditing financial statements

• Filing key documents with the Registrar of Societies

• Submitting income tax returns, if applicable

Adhering to these rules annually promotes good governance and smooth functioning of the society.

Importance of Annual Compliance for Your Society

1. Legal Validity and Recognition:
   Ensures your society maintains its registration and legal status, avoiding cancellation risks.

2. Transparency and Accountability:
   Helps keep activities and financials clear to members, regulators, and the public.

3. Access to Benefits:
   Enables eligibility for tax exemptions, government grants, and banking facilities.

4. Smooth Functioning:
   Promotes better governance and informed decision-making.

5. Credibility:
   Builds trust with stakeholders and the community, aiding long-term success.

6. Avoidance of Penalties:
   Prevents fines and legal trouble due to non-compliance.

Must-Do Annual Compliance for Societies

1. Holding the Annual General Meeting (AGM)

• Review activities and financial reports.

• Elect/manage governing body members.

• Approve the annual budget.

• Make key decisions on society affairs.

• Deadline: Within 6 months after financial year-end (e.g., Sept 30 for March 31 year-end).

2. Filing Annual Returns with the Registrar of Societies

• Submit audited financial statements.

• Provide updated list of committee members.

• Submit activity reports.

• Note: Cooperative Housing Societies have separate rules.

3. Auditing Society Accounts

• Audit by a qualified Chartered Accountant.

• Ensures accuracy, transparency, and detection of irregularities.

• Audit report is essential for AGM and filings.

4. Filing Income Tax Returns (ITR)

• Usually required, even if exempt from tax.

• Use ITR-5 form (for firms, associations, etc.).

• Deadline: October 31 of the assessment year.

• Non-filing may lead to penalties.

5. Understanding Form 12A & 80G for Tax Benefits

• 12A Registration: Tax exemption on society income (charitable/religious use).

• 80G Registration: Donors get tax deductions for contributions.

• Both need periodic renewal (typically every 5 years).

Other Important Compliance Areas

GST Registration & Filing

• Mandatory if turnover exceeds ₹20 lakh (₹10 lakh for special states) or monthly maintenance > ₹7,500/member (housing societies).

• File GSTR-1, GSTR-3B, and annual returns timely.

TDS Compliance

• Deduct TDS on salaries, rent, contractor payments, professional fees as applicable.

• Obtain TAN, deposit TDS, file quarterly returns (Forms 24Q, 26Q, 27Q).

• Issue TDS certificates (Form 16A).

Maintaining Registers and Records

• Membership, meeting minutes, accounts, asset registers, receipts, vouchers, etc.

• Important for audits and legal inspections.

Renewal of Society Registration

• Most states do not mandate renewal, but some (like Uttar Pradesh) require periodic re-registration.

• Stay updated on state-specific laws.

Reporting Changes

• Notify Registrar of any governing body changes or address updates promptly.

Annual Compliance Checklist

Documents Needed for Annual Filings

• Audited Financial Statements (Balance Sheet, Income & Expenditure, Receipts & Payments)

• Audit Report signed by Chartered Accountant

• AGM Notice & Minutes

• List of Governing Body Members with details

• Society PAN and TAN (if applicable)

• Bank Statements reconciled with accounts

• Supporting vouchers, receipts, bills

• GST registration and returns (if registered)

• TDS challans and returns (if applicable)

• Society Registration Certificate and bylaws

• Proof of registered office address

Costs of Annual Compliance for Societies

Costs depend on society size, turnover, complexity, and location.

Consequences of Non-Compliance

• Penalties and fines for late or missed filings

• Risk of society registration cancellation

• Loss of tax benefits and government grants

• Legal disputes and reputational damage

• Personal liability for governing members in case of negligence

• Increased scrutiny and intervention by authorities