The absence of a standardized policy for registered societies often leads to confusion regarding financial procedures. It is true that finance policies are unique to each society. However, the following policy is presented as a sample, but in line with the changing rules of the times. This may be used as guidelines for each society to have its own financial policy. This is not exhaustive, but it shows the important areas of lacunae we are facing at present. Failure to follow these will attract penalties or even endanger tax exemption of our registered societies. Though it may be a burden, keeping in mind the interests of our registered societies, it is recommended that all follow these guidelines strictly, lest our registered societies get in to tax or legal problems of non-compliance.
A) General Financial Policy
- Registered societies with an annual income exceeding Rs. 3,00,000/- are obliged to audit their annual accounts and file tax returns as per the norms, i.e., Form 9A (accumulation for 1 year) and Form 10 (accumulation for 5 years) filed before 31st August, Form 10B (audit report) before the end of September and ITR 7 before the end of October.
- Whatever cash is collected, be it as fees or donation or any other income, that cash to be first deposited in the bank and only then can it be used to make payments/ to withdraw cash for any of our expenses. We cannot use the cash collected or received for any payment without first depositing it in the bank.
Fr Alex G SJ
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