Actually, if you collect money, you need to keep accounts. If you are
making profits from the event, you need to pay income tax. In addition
there may be some other subsidiary or local laws that come into play, I
cant think of any that apply.
So long the amounts are small, and the events low key (eg dont put in
newsapper advts), I dont think Income Tax dept will bother (or even
know) unless someone brings it to their notice through a complaint or
tip-off. If that happens, then the person who has collected the money
will need to prove that they have not made money from it.
If the organisation is a non-profit organisation, they are exempt from
tax so long as the surplus money is not taken out of the organisation,
used for any personal purpose of any member or officebearer of the
organisation or used for the benefit of the members. However, in order
to avail of the benefit, you need to be registered as a coop society,
social organsation or non-profit company. EAch of these cost time and
money and invovle a lot of paper-work. Besides, after the registration,
you have to keep doing annyal paperwork like filing returns, ITax
statement, getting accounts audited, etc. Also you need to have a proper
constitution, by-laws and follow them deligently (eg holding AGM,
electing managing committee, etc.)
For a small setup all these dont make sense. One way out is, go ahead
and collect the money and spend it immediately on expenses of the
seminar or event (but keep detailed notes for future use). If the amount
is small, no one is going to bother you.
Another way is if one of the colleges or some other organisation takes
the event under their wings. (I am not sure how it will work, but it is
possible). Eg. College X may allow LUG to hold the event in their hall
or class room, collect the money and spend it on what ever is required.
Ofcourse, LUG will need to ensure that the college does not go in loss
on the event. Or perhaps one of the colleges can actually sponser the
LUG.....ie, they can form the LUG as a part of their college facilities
like they have student society, book club, etc.
BTW, the cost of registering the LUG as a society is Rs. 10K to Rs. 15K
as one time cost, at least Rs. 5K each year in paper work.
Frederick Noronha (FN) wrote:
---------- Forwarded message ----------
Date: Sun, 21 Mar 2004 05:23:19 -0800 (PST)
From: Sagar Behere <sagar_behere(a)yahoo.com>
Subject: money matters
I am talking on behalf of NashLUG, the Nashik Linux
We are a fledgling linux users group and to spread the
Linux word around, we often go to nearby colleges and
hold seminars on various aspects of GNU and linux.
In doing these seminars, we incur some costs and so
far the group members have been bearing this
We have this idea of charging the seminar members some
nominal entry fee, somewhere in the range of 20 to 50
rupees. In these seminars, we'd also be distributing
copies of knoppix or similar stuff.
Which brings us to the point in question. During one
of our discussions, a question came up as to whether
we, a bunch of enthusiasts, were authorised to collect
money. We do NOT want to run into problems later on
with, say, the income tax authorities or their kin.
What is normally done under such circumstances? Do we
have to register our group with some authority in
order to collect money? What do other LUG's do? I am
sure there are precedents to this problem.
Thanks in advance,
Sagar (for NashLUG)
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