Is legislative framework against sustainability in NPOs

Dear Members, ‎

I am working on registering a not-for-profit which will involve itself into research activities in ‎technology. The outcomes will be mostly public goods, in terms of papers, open source code, etc. ‎At the same time, it may generate IP, income from licensing IP and ownership (equity) in ‎companies that come out of the work of the center. This will be used for sustaining the center. ‎

As far as I know, there is restrictions by the IT Act that organizations (for Section 8/Trusts which ‎have IT exemption) can’t own equity and also, their total income (from commercial activities) ‎should not be more than 20% of all receipts. ‎

‎- Does this mean that a not-for-profit cannot generate income to pay off for their expenses? If ‎that is the case, then how do not-for-profits become sustainable?‎

‎- Can NFP own patents or equity? ‎

Thanks for the help.‎
Varun

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