Socio Research & Reform Foundation

Dear Sir/Madam,

I am writing here to get some clarity on FCRA funds.

One society is having 2 FCRA bank accounts one utilization account in PNB(This was the old receipt and utilization account) which is currently the deemed utilization account. After opening the FCRA SBI New Delhi Account, the society has not received any FCRA donations. The SBI account does not have any balance in it. Today the society received a email stating that the due to no transactions in the account it will be marked inoperative.

Can we transfer some funds from the PNB account to the SBI account which will be utilized at a later date for the societies activities only.

Thanks in advance,
Noel Gole

MHA has come out with a clarification through a Public Notice dt 21-1-2025, that once a FCRA registration is suspended or cancelled, they cannot use FCRA funds lying either in Designated Bank account or Utilization bank Accounts. While in case of suspension / cancellation, FCRA authorities intimate SBI of the same, however no intimation goes to bankers who are maintaining Utilisation Accounts. Therefore, such bankers are not aware of the of suspension / cancellation of FCRA registration. At times, NPOs continue to use funds lying in these Utilisation bank accounts, even after FCRA has been suspended or cancelled. FCRA Dept has now clarified that such use is violative of FCRA provisions, and concerned NPOs could face penal action for the same.

The Dept has also clarified that any NPO, which fails to apply for renewal before expiry of registration, their FCRA registration falls under the category of Deem to be Ceased. Such NPOs cannot use FCRA funds lying in designated / utilization bank accounts after the registration has deemed to cease. Such NPOs who use fund after this date, are violating FCRA provisions, and could face penal actions.

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Socio Research & Reform Foundation (NGO)                       
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008

FCRA Form FC4 has been amended vide FCRA Amendment Rules 2024. These amendments are summarised below.

• Unspent Admin Expenses: If an entity has not spent allowable 20% of the FCRA funds received in a year, unspent part can be carried forward to next year. Thus say, an Association has received Rs 1 crore as FC receipts during FY 2024-25 and therefore at the maximum is allowed to spend Rs 20 lakh under Admin Heads. If it spends, say Rs 15 lakh only during FY 2024-25, new rules enable it to carry forward Rs 5 lakh to next year (FY 2025-26).
• Details of Chartered Accountant certifying FC4: Now details of chartered accountant who provides FC4 certificate are to be given in FC4. Details include Name, address, Member Registration No., Email address, Date of Issue of certificate, In case any violations pointed out then these need to be specified in the FC4.
• Chartered Accountant Certificate format amended: Now CA certificate needs to state that there are no violations, and in case there are violations, then these violations need to be specified.
• TDS refund rec’d in non-FCRA Bank A/c can be transferred to FCRA Bank A/c: FCRA authorities have vide Public Notice dt. 31/12/2024 have allowed to transfer any TDS refund received in non-FCRA account to be deposited in FCRA Bank a/c. In case the refund covers both FCRA deposits as well as non-FCRA deposits, than appropriate proportion of the same can be transferred to FCRA bank account from non-FCRA Bank account. FC4 has been suitably amended to disclose such refunds separately.

SRRF Dialogue Comment: Above changes reflect two major developments.

1. By clarifying on TDS issue being deposited in non-FCRA Bank a/c, FCRA Dept for first time has shown some responsiveness to issues being raised by Associations. Hope there will be more such responsiveness by the Dept, on part of Associations, they should write more regularly to the Dept, wherever they face problems.
2. On the line of Form 10B, FCRA Dept is also making Chartered Accountants specify that there are no violations, and if violations are there, these need to be specified. Thus the Dept forcing Chartered Accountants to be more accountable.

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Socio Research & Reform Foundation (NGO)                       
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008

Regarding refund of TDS pertaining to foreign contribution received in non-FCRA bank account can be transferred to FCRA bank account…(click here for notification)

Administrative expenses can be carried forward to the next year…(click here for notification)

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Socio Research & Reform Foundation (NGO)                       
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008

Validity of FCRA registration has been extended till 31-Mar-2025 vide a Public Notice issued by the FCRA (Director) on 27^th December 2025. Thus all those NGOs whose FCRA had been earlier extended till 31-Dec-24 because their renewal application was pending with the FCRA Dept.

Also in case an NGO’s FCRA expires between 1^st Jan 2025 and 31^st March 2025 and they have applied for FCRA renewal before expiry of 5 year period from the date of previous FCRA registration, then their FCRA will also be extended to 30^th June 2024.

In case renewal application is refused then the validity of the certificate shall be deemed to have expired on the date of refusal of application of renewal. In such a situation organization would not be eligible to either receive or utilize FCRA funds after such date.

Documents requirements made more stringent at the time of Renewal/Application

As per a press report all those applying for FCRA or renewing their FCRA would need to submit key documents like Memorandum of Association/Trust Deed, etc. Further now activity report has to be submitted for each-year and not a generic report, alongwith Accounts, including Receipt & Payment Account for each year.

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Socio Research & Reform Foundation (NGO)                       
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008

Namaste Sir,

Greetings of the day!

We have been going through the blogs of Socio Research & Reform Foundation regarding FCRA. 

We are Anatta Sangha Trust registered as a charitable public Trust under Indian Trusts Act 1882.

We want to invite foreign volunteers on an E3 Employment Visa to India (for honorary work with an NGO). So that they can work with us voluntarily in our projects for long term.

Kindly guide us whether FCRA registration is mandatory for our Trust to send them E3 visa invites along with our various registration documents. As of now, we don’t have FCRA registration.

We look forward to hearing from you.

Thanking You,

Warm Regards,

Sangha Das

Anatta Sangha Trust

Dear Sir/Madam,

I got your contact information from your website and have a quick question.

• Can a NRI be on the executive committee of a non-profit organization which is applying for FCRA renewal? This NRI still holds a valid Indian passport, Aadhar card etc.

Thank you so much in advance for your advice.

Best regards,

Seshu

Hope this email finds you well and in good health !

I want to understand the following:

We have 12A registered entity that does not plan to apply for upcoming renewal in 2025-26 and continue to file ITR as AOP. 

What are the implications for its accumulated unrestricted funds and building property. Will the IT department charge tax or penalize in any way?

Please Help

Thanks and Regards

Amrut Mistry
IBTADA

Dear Sir,

Recently whilst doing financial review of a foundation I came across the following:

Organisations legal documents such as 12 AA Registration, Society registration document, PAN, and all other documents were in the name of XYZ foundation. Organisation is filing IT and FC return in the name of XYZ foundation

However in the FC renewal registration document the following is mentioned :

The chief Functionary
ABC Hospital funded and managed by XYZ foundation . FC bank account is opened in the name of ABC Hospital and the account number mentioned in the FC bank account is same to what is mentioned in the FC renewal registration document.. Organisation is filing FC returns in the name of : ABC Hospital funded and managed by XYZ foundation

Would like to know
1) Can we go ahead and do partnership with the organisation
2) if answer to the above question is yes- then funds to be released in the name of ABC hospital as bank account is opened in that name whereas entity is registered in the name of XYZ foundation

Please suggest way forward

Thanks
Ratish

AY 2023-24
In case your NPO has still not filed Audit Report in Form 10B/10BB for AY 2023-24 (i.e. FY 2022-23), which was required to be filed by 31-3-2024, can breathe easy and file the same by 10^th November 2024. CBDT has come out with a notification extending the date. You can access the notification by clicking here, It seems that this is applicable to all those, who have not filed the Audit Report or filed in the wrong format, and are required to file the same in correct format.

Choose Correct Form
A number of NPOs made mistake in choosing the correct Form. Please re-check, and if incorrect Form has been filed, you can still file the correct Form.

Form 10B to be filed if anyone of the following conditions is satisfied:

• NPO’s Total income during the PY (without giving effect to S.10(23C), S.11 or S.12) exceeds Rs 5 crores.
• If NPO has received any foreign contribution during the PY.
• If the NPO has applied any part of the income outside India during the PY.

For all other cases latest Form No.10BB should be used.

For more details, please refer to Rule 16CC / Rule 17B of IT Rules.

AY 2024-25
It may be noted that for AY 2024-25 (i.e. FY 2023-24), the date for filing these documents was 30^th September 2024. Hope the same has been complied with.

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Socio Research & Reform Foundation (NGO)                       
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008