A Section 8 company must meet every legal filing set by the Companies Act, 2013 and the Income Tax Act. These filings include the auditor appointment (ADT-1), the annual filings (AOC-4 and MGT-7), the income tax return (ITR-7), the audit report (Form 10B or 10BB), Director KYC (DIR-3 KYC), and event-based forms. If the company files late, it pays a penalty of ₹10 lakh to ₹1 crore, its directors pay ₹25,000 to ₹25 lakh or face imprisonment up to 3 years, and it risks losing its Section 8 licence.
The MCA regulates a Section 8 company as strictly as a private limited company, even though it runs as a nonprofit. The company must also follow the Income Tax Act, GST law where it applies, the Foreign Contribution (Regulation) Act, and the conditions tied to its registration and 80G approval.
This guide details every compliance applicable to a Section 8 company, including the relevant form, the due date, and the consequence of default.
What is a Section 8 Company?
A Section 8 company is a nonprofit that incorporates under Section 8 of the Companies Act, 2013, to promote a cause such as commerce, art, science, sports, education, research, social welfare, religion, charity, or protection of the environment. The company must apply all its profit to these objects and cannot distribute any profit as a dividend to its members.
The law incorporates a Section 8 company as a limited company but exempts it from adding “Limited” or “Private Limited” to its name. The MCA regulates it through the Registrar of Companies (ROC), in the same way it regulates other companies.
Key Benefits of a Section 8 Company
A Section 8 company gives founders a formal structure to run a nonprofit while it claims tax benefits and builds trust with donors. These are the main benefits of a Section 8 company in India:
- Stronger credibility: The Ministry of Corporate Affairs regulates a Section 8 company under the Companies Act, 2013, so it earns more trust than a trust or society. The company also prepares and files audited financial statements every year, which reassures donors, banks, and grant agencies.
- No minimum capital: The law sets no minimum capital to start a Section 8 company. Founders can register the company with any amount they choose.
- Income tax exemption: A Section 8 company can claim income tax exemption after it registers under Section 332 of the Income Tax Act, 2025, which replaced Section 12A of the Income Tax Act, 1961. Donors who contribute to the company can claim a deduction under Section 354, which replaced Section 80G.
- Separate legal identity: A Section 8 company works as a separate legal entity and enjoys perpetual succession. Its members hold limited liability, so their personal assets stay protected.
- Stamp duty concession: Many state governments charge lower stamp duty when founders incorporate a Section 8 company.
- Access to foreign funding: A Section 8 company can accept foreign donations after it obtains FCRA registration under the Foreign Contribution (Regulation) Act, 2010.
- Eligibility for CSR funds: Other companies can route their CSR spending to a registered Section 8 company under Schedule VII of the Companies Act, 2013.
A Section 8 company suits founders who want the governance and reporting standards of a company rather than the lighter structure of a trust or society.
Types of Section 8 Company Compliances in India
The Companies Act, 2013, groups the compliances for a Section 8 company into three types. Knowing these types first makes the full checklist below easier to follow:
| Type | What Triggers It | Frequency |
| Time-Based (Annual) | Fixed deadlines that fall every financial year | Annual and recurring |
| Event-Based | A specific corporate event, such as a change of director or auditor | Only when the event occurs |
| Criteria-Based | The company crosses a set limit of capital, turnover, or activity | Only when it crosses the limit |
Important: Exemptions available to Section 8 companies under MCA notifications do not apply to filings under AOC-4, MGT-7, or ITR-7. Full penalties apply for late filings. Further, companies already in default under Sections 137 or 92 lose the benefit of these exemptions.
Compliance for Section 8 Company: Detailed List
The Companies Act, 2013, holds a Section 8 company to the same compliance standards as other companies, and additional tax and regulatory laws add further duties specific to nonprofits. These obligations fall into three main categories: tax compliance, annual MCA compliance, and event-based compliance:
1. Tax Compliance for Section 8 Companies
Every Section 8 company must complete its tax-related filings on time to maintain its 12A and 80G status, FCRA approval (if applicable), and overall legal standing.
a. Income Tax Exemption
A Section 8 company can claim income tax exemption once it registers under Section 332 of the Income Tax Act, 2025, which replaced Section 12A of the 1961 Act from 1 April 2026. Existing 12A or 12AB holders keep their exemption and now count as a Registered Non-Profit Organization (RNPO), with no fresh application needed until their registration expires.
To keep the exemption, the company must spend its income only on the charitable objects in its MOA, apply at least 85% of income each year, and pass nothing to members for personal benefit.
b. 12A Registration
Registration under Section 332 of the Income Tax Act, 2025 lets a Section 8 company claim full exemption on its charitable income. This section replaced the old 12A and 12AB registration from 1 April 2026. Without it, the company pays tax on its surplus income.
c. 80G Registration
Section 354 registration lets donors claim a 50% or 100% deduction on their donations to the company. This section replaced Section 80G of the 1961 Act. The benefit helps the company raise funds, since donors lower their own tax when they give.
d. TDS (Tax Deducted at Source)
A Section 8 company must deduct TDS when it pays a contractor, professional, employee, or landlord, and it must deduct at the rate the law prescribes for each payment. The company must deposit this TDS with the government by the due date, and it must file quarterly TDS returns in the applicable forms, such as Form 24Q for salary payments and Form 26Q for other payments.
e. Goods and Services Tax (GST)
A Section 8 company must obtain GST registration if its aggregate annual turnover from taxable supplies exceeds ₹20 lakh (₹10 lakh in special category states). Charitable activities related to religion, education, and healthcare may be exempt under specific GST notifications. Once registered, monthly/quarterly GST returns must be filed.
f. Foreign Contribution Regulation Act (FCRA)
If a Section 8 company intends to receive foreign donations or grants from abroad, it must obtain FCRA registration under the Foreign Contribution (Regulation) Act, 2010. FCRA-registered entities must file annual returns (Form FC-4) and maintain a designated FCRA bank account at SBI, New Delhi Main Branch.
g. Audit Report (Form 10B / Form 10BB)
Section 8 companies registered under Section 12A/12AB or claiming exemption under Section 10(23C) must file an audit report annually with the Income Tax Department:
- Form 10B applies if the total income exceeds ₹5 crore, the entity has received any foreign contribution, or has applied any income outside India.
- Form 10BB applies in all other cases.
Both forms must be filed at least one month before the due date for filing the Income Tax Return.
h. Requirements for Audits
Every Section 8 company must appoint a Chartered Accountant as its statutory auditor and conduct an annual audit irrespective of turnover. The audit report must be filed with the Income Tax Department along with the annual ITR-7.
2. Annual Compliance for Section 8 Company in India
Under Section 8, businesses are subject to several legal obligations and various annual compliance reports. The following are compliance requirements a Section 8 company must comply with every year:
a. Appointment of Auditors (Form ADT-1)
Under Section 139 of the Companies Act, 2013, every Section 8 company must appoint a statutory auditor for a term of five consecutive financial years (in the case of the first auditor appointed within 30 days of incorporation by the Board). The appointment in subsequent AGMs is intimated to the MCA in Form ADT-1 within 15 days from the date of the AGM. Failure to file ADT-1 within the deadline attracts higher MCA fees and a continuing default penalty.
b. Maintaining Statutory record
Under Section 8 of the Companies Act of 2013, firms are required to maintain a record that contains details on:
- Loans they have taken out,
- Details of directors (DIN, name, address, date of appointment),
- Changes to their directorship,
- Charges they have made, and
- Investments they have made.
c. Conduct Meetings
Section 8 companies must hold at least one Annual General Meeting (AGM) each year and a minimum of two board meetings (one every six months).
d. Report from the Board of Directors
All company directors are obliged to review the Director’s Report, which contains information on the business’s accounting, compliance, corporate social responsibility, and other appendices. The report must be turned in with the AOC-4 Form.
Failure to submit the AOC-4 Form within 30 days following the AGM date will result in penalties for the business.
e. Preparing Financial Statements
A cash flow statement, balance sheet, and profit and loss statement are among the financial statements that the company is required to provide. These documents have to be filed with the Registrar of Companies (ROC) and submitted to an audit by an auditor.
Failing to file the MGT-7 Form within 60 days of the AGM date will result in penalties for the business.
f. Submission of Income Tax Return
Since every Section 8 company is mandatorily subject to audit, the applicable due date for filing ITR-7 is 31 October of the assessment year. The ITR must disclose the total income, application of income for charitable purposes, exempt income, and details of incorporation under Sections 12A/12AB and 80G. Late filing attracts interest under Section 234A and a late filing fee under Section 234F.
g. Director KYC (DIR-3 KYC)
Every director who has been allotted a DIN must file DIR-3 KYC by 30 September every year. Failure to file results in the deactivation of the DIN, which can only be reactivated after paying a late fee of ₹5,000.
3. Event-Based Compliance for Section 8 Companies
A Section 8 company must file the following forms upon the occurrence of specific corporate events:
| Event | Form | Filing Deadline | Consequence of Delay |
| Director appointment or resignation | DIR-12 | Within 30 days of the event | MCA record stays outdated; ₹1,000 per day, up to ₹5 lakh |
| Auditor resignation | ADT-3 | Within 30 days of resignation | Higher filing fees and continuing default |
| New auditor appointment | ADT-1 | Within 15 days of the appointment | Higher filing fees |
| Amendment to MOA or AOA (special resolution) | MGT-14 | Within 30 days of the resolution | ₹10,000, plus ₹100 per day of continuing default |
| Change of registered office | INC-22 | Within 30 days of the shift | Fees, plus ROC approval for a move between states |
| Creation or change of charge | CHG-1 | Within 30 days of the event | Higher fees, up to 10 times the normal fee |
Note: A Section 8 company does not file MGT-14 for board resolutions under Section 179(3). It must still file MGT-14 for special resolutions passed in a general meeting, such as a change to the MOA or AOA.
Section 8 Company Annual Compliance Checklist
Every financial year, a Section 8 company must complete the following ROC, tax, and statutory filings to stay compliant:
| Compliance | Form | Due Date | Filed With | Consequence of Default |
| Appoint Auditor | ADT-1 | Within 15 days of the AGM | MCA | Higher filing fees based on delay |
| File Financial Statements | AOC-4 | Within 30 days of the AGM | ROC | ₹100 per day, no upper cap |
| File Annual Return | MGT-7 | Within 60 days of the AGM | ROC | ₹100 per day, no upper cap |
| Director KYC | DIR-3 KYC | 30 September every year | MCA | DIN deactivated; ₹5,000 reactivation fee |
| Income Tax Return | ITR-7 | 31 October | Income Tax Department | Interest under Section 234A, plus late fee |
| Audit Report | Form 10B or 10BB | One month before the ITR due date (normally 30 September) | Income Tax Department | Loss of tax exemption for the year |
| Donation Statement (80G) | Form 10BD | 31 May every year | Income Tax Department | ₹200 per day of default |
| Donation Certificates | Form 10BE | 31 May every year | Issued to donors | Donors lose the deduction |
| Deposit Return | DPT-3 | 30 June every year | ROC | Up to ₹5,000, plus ₹500 per day of continuing default |
| MSME Payment Reporting | MSME-1 | 31 October (Apr to Sep), 30 April (Oct to Mar) | MCA | ₹20,000, plus ₹1,000 per day, up to ₹3 lakh |
| Director Interest Disclosure | MBP-1 | First board meeting of the year | Board records | Up to ₹1,00,000 per director under Section 184 |
| Annual General Meeting | AGM | By 30 September every year | Held by the company | Up to ₹1,00,000, plus ₹5,000 per day of continuing default |
Note: A Section 8 company must file DPT-3 even for loans or exempt deposits outstanding on 31 March. It files MSME-1 only when payments to a micro or small enterprise supplier stay overdue beyond 45 days. No nil filing is needed when no such dues exist.
Penalties for Non-Compliance with Section 8 Compliances
If a Section 8 company fails to meet statutory requirements, it faces the following penalties:
| Violation | Penalty on Company | Penalty on Directors / Officers | Governing Section |
|---|---|---|---|
| General non-compliance | ₹10 lakh – ₹1 crore | ₹25,000 – ₹25 lakh or imprisonment up to 3 years, or both | Section 8(11) |
| Fraudulent operations | Same as above | Imprisonment 6 months – 10 years + fine up to 3× the fraud amount | Section 447 |
| Late filing of AOC-4 / MGT-7 | ₹100 per day, no upper limit | ₹100 per day, no upper limit | Sections 137 & 92 |
| Non-holding of AGM | Up to ₹1,00,000 | ₹1,00,000 + ₹5,000 per day continuing default | Section 99 |
| Failure to file INC-20A | ₹50,000 | ₹1,000 per day up to ₹1,00,000 | Section 10A |
| Non-filing of DIR-3 KYC | — | DIN deactivation + ₹5,000 reactivation fee | Rule 12A |
| Non-filing for 3 consecutive years | ROC may strike off the company | Directors disqualified for 5 years from all companies | Section 164(2) |
| False statements in filings | — | Imprisonment up to 2 years + fine | Section 448 |
Important: If a Section 8 company loses its license under Section 8(6), it also loses its 12A, 80G, and FCRA registrations, along with eligibility to receive CSR funds. Section 164(2) disqualification applies to all directorships held by the disqualified director, not just the defaulting company.
