Transfer of Assets u/s 35AC

Dear Sir,

We are having exemption u/s 35 AC for specific one project. We want to know after completion of the project can we transfer asset from project to the organization?


Sushma Bhonsale
Head – Accounts
Deepak Foundation
Within Nijanand Ashram Premises,
Nr. Laxmi Studio, Adjoining L&T Knowledge City,
On NH-8, Ta. & Dist. Vadodara-390 019

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4 Responses to Transfer of Assets u/s 35AC

  1. Dear Sushma,

    There is always a mis-conception (particularly where project balance sheets are prepared) that project assets need to be transferred to NGO. Even where a project balance sheet is being prepared, ultimately it gets merged within the balance sheet of the NGO. Since project balance sheets are not submitted under Income Tax or passed by the AGM. It is the consolidated balance sheet of the NGO. Thus assets legally already belong to NGO, hence no question of transfer to the organisation.

    Thus a proper question would be what would be the status of assets created out of S.35AC project at the end of the project. This answer lies in the S.35AC permission that was granted by the Govt. Often the permissions put restriction that these assets cannot be disposed off or when the project is closed, these may need to be transferred to particular bodies (could be Gram Panchayat or other similar agencies). So you may wish to go through the original S. 35AC permission and if you find that there is no mention or restriction what needs to be done to the assets after the closure of the project, then asset remains where it is, i.e. in NGO’s balance sheet. However chances are that there would be restrictions.

    Hope the above is helpful to solve your problem,

    warm rgds

    subhash mittal

  2. Gopi David, VIKASAM, Hyderabad. says:

    In my understanding -if the assets generated with funds transferred to NGO account, they are naturally part and parcel of that NGO, there no chance for issue of transfer of assets from project to NGO, and they are not separate from NGO.

    Even though funds routed and spent via NGO account but-if the assets generated with funds designated to peoples committees, CBOs, and Institutions promoted by NGO as part of vision of any project, then those assets belongs to that entity promoted by NGO but not of NGO.

    I am writing this opinion based on practical issues or problems raised and suffered set backs with in internal structures of NGOs.

    Thanking you.

    • Adil Bhai - MMBA Rajasthan says:

      Yes i agree with Gopi David, VIKASAM but i just mention its depend on donor and ngo agreements also. but they not mention in agreement so its for ngo .

      Adil bhai

  3. B V Soma Sastry says:

    Dear Sushma,

    Greetings from Hyderabad!

    As per my understanding the transfer of the asset from project to the organization depends on the terms / conditions laid down in the agreement between the donor and the organization. If the agreement is silent on the issue, the asset remains with the organization.

    Thanks and regards,
    B V Soma Sastry
    Director – Finance and Admin
    Centre for World Solidarity
    12-13-438, Street No. 1, Tarnaka
    Secunderabad 500 017
    Andhra Pradesh

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