Sale of FCRA assets

Dear dialogue-members,

We have a four wheeler vehicle purchased in a project under FCRA 5 years back.
Now the vehicle condition is not good, hence we want to sale it. Further we want to purchase a new vehicle putting the earned money from sale, as a seed money/Down Payment to get a loan from Bank for the purpose. Can we do so? Then what is the process we have to follow?

Expecting response.

R.K.Mohanty

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6 Responses to Sale of FCRA assets

  1. Subhash Mittal says:

    My suggestion would be that avoid making payments for new vehicle partly from FC account and partly from non-FC account, since this could create problems for subsequent compliance.

  2. B V Soma Sastry says:

    Dear Mr. Mohanty,

    There is no need to take any permission from MoHA for this. The proceeds of the should properly recorded as receipt in FC books and the corresponding utilization when the vehicle is purchased.

    Thanks and regards,

    B V Soma Sastry

  3. R.K.Mohanty says:

    Dear Mr. Sastryji,
    Thanks for the response. Actually the loan shall be from different bank and installment shall be paid from Non-FC accounts. Can it be done and what process to be taken up. Further do we need to take permission from the Ministry in advance.
    Regards

  4. V.B.Chandrasekaran says:

    It will be seen and also depends how BIG the funds you otherwise get are. Say, if you get less than 20 lakhs per year, errors on this account need not be bothered. Many rural based initiatives do not have that efficient accounts though they are good.
    Regards,
    V.B.Chandrasekaran, Chatti Mahatma Gandhi Aashramam,
    Chatti Post, Chinthur Mandal, East Godavari District,
    Andhra Pradesh, Pin Code: 507129.

  5. B V Soma Sastry says:

    Dear Mr. Mohanty,

    You can very much do this. The earnings from the sale of old vehicle will be deposited in the FC account as the asset was purchased from FC funds. To the extent that the amount is paid from the FC account for the purchase of the new vehicle, the same will be recorded in the FC books of accounts.

    Since the organizations is taking loan from the bank for the purchase of the vehicle, it is important to know from which account the installments (with interest) will be paid out to the bank. That will determine the booking of the balance expenditure for the new procurement.

    Thanks and regards,

    B V Soma Sastry

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