Skip to main content

What do you understand by Not for Profit Organization (NPO)?

Not for Profit Organizations (NPOs) are also often referred to as

  • Voluntary Organizations,
  • Civil Society Organizations 
  • Non-Governmental Organizations 
  • Non-Profit Organizations
  • Charities, and
  • Other similar terms
The requirement to register under a statute may apply to all charities and humanitarian agencies.

Non Profit Organizations includes entities that:

1) are registered under the Associations Registration Act, 2034 (1977) or other appropriate Act with objectives that are carrying out social, religious, charitable, philanthropic and communities contribution activities. These registered organizations are generally affiliated with the Social Welfare Council for different social or communities or philanthropic activities in the jurisdiction of Nepal and hence those entities are known as NGOs, clubs, Ethnical Institutions, Political Institutions, Scientific Institutions, religious institutions, Cultural Charitable Institutions, Philanthropic Institutions.

2) are registered outside the jurisdiction of Nepal (International Not for profit Organization (INPO) or charitable institutions) who have signed general agreements and project/program agreement with Social Welfare Council or taking other necessary permit where necessary to operate for social communities or governmental non-profit activities or non-revenue generating activities.

3) that come into existence in the jurisdiction of Nepal following the bilateral agreements with the Government of Nepal for carrying out various programs or project activities without any revenue-generating or profit-making activities.

Above is definition was officially published by Nepal Accounting Standard Board of Nepal.

Comments

Most Viewed

Windfall Gain Tax (आकस्मिक लाभमा कर) per Nepal Income Tax Act

Nepal's Income Tax Act defines Windfall gain as a gain obtained by means of lottery, gift, prize, tips, share of earning in a game (जितौरी)  or any other gain acquired incidentally.  Let us explain by example what can potentially be Windfall Gain.  1) Let's say apple recently launched a iPhone 14 in Nepal. Part of such launch, company offered its customer who buys iPhone, an iPad for free. The market value of the iPhone is Rs. 214,000 and that of iPad is Rs. 189,000. In such case, customer who received Rs. 189,000 worth of iPad without any additional cost will be considered a prize hence, a windfall gain. 2) Recently DRS gaming won US$ 292,000 (approx. Rs 4 crore) for being runner's up in the grand finals of the PUBG Mobile Global Championship. Let's assume here that DRS gaming has not been registered as a company but simply represented by individuals. If I am not mistaken, there are 4 members in the team. So, each individual will have won Rs. 1 crore as share of earni...

Financial Statement Template for Not for Profit Organizations (NGOs and INGOs)

Here's the recommended financial statement template by Nepal Accounting Standard (NAS) for Not for Profit Organizations (NGOs and INGOs) that you can download and modify to meet your requirements. These are developed to meet the common minimum information required of NPOs. Users can add additional information to ensure financial transparency and provide relevant information to different stakeholders. Nepal Accounting Standard board believes that by adopting the following template, users can easily understand the financial statements and also,  be able to compare with other NPOs. Model Financial Statement for NPOs (Based on NAS for NPOs) is given below: You can also download the template from the link below: Click Here

Maximizing Tax Benefits: Understanding Insurance Premium Deductions in Nepalese Income Tax

Question:  If an employee is not enrolled in any retirement fund but has paid 40,000 for life insurance or 10,000 for health insurance, should these insurance payments be subtracted from their taxable income or not?  (this was posed in one of the facebook group) Answer:  Regardless of whether an individual has contributed to a retirement fund, they remain eligible to reduce Rs. 40,000 for life insurance and Rs. 10,000 for health insurance from their taxable income. You might be wondering how?  Let's delve into the deductions permitted by the Nepalese Income Tax Act, 2058, regarding life, health, and property insurance premiums. This blog should help you understand how insurance payments can impact your taxable income. 1) Life Insurance Deduction: For residents holding life insurance, you can claim a deduction of up to Rs. 40,000 or the actual annual premium amount (whichever is lower) from your taxable income. Refer to Annex-1, Clause 12 for this provision. 2) Health...