Clarification on Lokpal Act

Dear Members,

Now that NGOs are under the purview of Lokpal Act, many clarifications are required:

  1. What ‘executive’ mean as per the Act? Would it mean ALL staff?
  2. Would all trustees become ‘executives’ or only those who are remunerated by AT?
  3. Do the ‘executives’ have to fill in the returns every year till they are with the Trust or only during the year when the Trust received more than “One Crore only” from the Central Government or “Ten Lakhs” from foreign source?
  4. What is the grant from Central Government? Only if directly received or through a State Health Society, NGO partner? WOuld it be applicable to all those partners who received parts of this One Crore/ten Lakhs also through the Trust?
  5. What are the Return forms? If not available, when they would be?
  6. What is included in the term Wealth, does it mean immovable and movable property, investments, ornaments, cash and bank? How to value the wealth? Value at the time of purchase? Or current value? Wealth of only the ‘executives’ or ‘the family’ or ‘the spouse’?

Kindly advice.

Thanks and regards

Dhruv Mankad

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11 Responses to Clarification on Lokpal Act

  1. Ravistan Anthony says:

    Dear Sir,

    This is related to Maharashtra State.
    We are registered under Bombay Public Trust Act, 1950.
    and our Mumbai office has 12 employees and overall we have
    around 55 employees.
    My Questions are:
    1. Do our Trust need to register under Shop and Establishment Act.
    2. Labour Welfare fund
    3. Registration under ESIC (Trust had taken the Mediclaim for each
    every employees for the Sum of INR 2 Lakhs)
    4. Any registration under Gratuity (We pay gratify to the Staffs as per the gratuity
    law, no registration had been done)

    Thanking you,

    With regards,


  2. Anil K Singh says:

    Now no need to declare assets and liability under Lokpal Bill
    Relief regarding Lokpal Act on the anvil
    A meeting was convened today (26th July 26, 2016) in the Parliament office of the Finance Minister Mr. Arun Jaitley where a number of MPs were present, including those that were present in the delegation that met the Prime Minister yesterday.
    Mr. Arun Jaitley, who convened the meeting, conveyed to the MPs present that, as a large number of people were being adversely affected by this provision of the Lokpal Act, the Government had taken the decision to return it to the Standing Committee for review. Until such time as a solution was found and further discussion had taken place across parties, the relevant provision would be held in abeyance. (In other words there is no specific date for a new compliance deadline – it could be indefinite).
    Furthermore, Mr. Jaitley added that the spouses and dependent children of Government servants were also proposed to be excluded from the applicability of this provision.
    A formal announcement will be issued very shortly by the government.
    Filing writ petitions in the courts may also have to be reconsidered.
    Our Advisory:
    1. Please do NOT upload details regarding your assets on the MHA website or any other website.
    2. Please do NOT fall prey to panic being whipped up by certain networks and insisting on compliance.

  3. Subhash Mittal says:

    Dear Dhruv,

    1 &2. The word used in the Act are ‘Director, Manager, secretary or other officer’. I do not think it says executive. While it is not easy to define who all fall in this definition. My first inclination would be to cover all those who have these words included in the definition plus all office bearers, since secretary is included.
    3. Returns have to be filed till the funds rec’d during the eligibility period are utilised.
    4. This is not an easy question and I would tend to cover only what has come directly from the central govt. or central govt controlled entity. Otherwise one could even cover funds from state govt, since these are from central govt., it will become very complicated.
    5&6 Please see the forms which are now easily available from Dept of Personnel & Training.

  4. Amitabha Sadangi says:

    NEW DELHI: The government on Thursday agreed to the demand of some Rajya Sabha members for extension of the date for filing of asset disclosures by trustees of a certain category of NGOs beyond July 31.
    The issue was raised by nominated member Anu Aga who said the Lok Pal Act, 2013 covers among other things, trustees and senior office bearers of NGOs who receive foreign funds of Rs 10 lakh or more and government grants of over Rs 1 crore.
    All trustees and senior office bearers are required to disclose assets and liabilities of themselves, spouse and dependent children. The information is in the public domain, she added.
    As per a recent notification, the assets have to be declared by July 31 failing which it would be presumed that the asset has been acquired through corrupt means leading to penal action, she said.
    “As the disclosures are required to be made before July 31 failing which there will be dire consequences, the issue needs to be addressed urgently… Trustees of these NGOs are not public servants…
    “Given that the detailed information about their personal and private assets would be in public domain, many trustees are apprehensive that they would be subject to possible harassment. Some of them have resigned from positions to avoid this consequences,” the member said.
    Aga added that because of this, NGOs would be deprived of guidance from experienced trustees. She also said that NGOs have a detailed disclosure procedure.

  5. Sir,

    A NGO receives more than Rs. 10 lakh every year under FCRA and spends most of it in that year itself carrying forward unspent balance well below the limit of Rs. 10 lakh. The NGO is totally voluntary and all its office bearers work for it in honorary capacity not receiving even a rupee as honorarium. Will they still have to file returns? Apart from Secretary, there are other office bearers like, President, Vice-President, Treasurer, Joint Tresurer, Joint secretary etc. Will all of them be treated as office bearers for purposes of filing Returns under the amended LokPal Act?

    • Subhash Mittal says:

      Public servant is not defined in the Lokpal Act.

      It is defined under Prevention of Corruption Act 1988. Clause 2 (xii) defines public servant as any person who is an office-bearer or an employee of an educational, scientific, social, cultural or other institution, in whatever manner established, receiving or having received any financial assistance from the Central Government or any State Government, or local or other public authority. Hence this definition could be applicable to all office bearers.

  6. Rajesh Arya says:

    I hope my response below may respond to some of the open questions –

    There is new amendment for NGOs in which NGOs receiving more than Rs One Crore as Government grant and donations above Rs 10 lakh from abroad , have been brought under the ambit of Lokpal.

    NGOs receiving more than Rs One Crore as Government grant and donations above Rs 10 lakh from abroad , have been brought under the ambit of Lokpal.

    The Lokpal and Lokayuktas Act 2013 (LLA, 2013) has been amended to include the functionaries and office bearers of NPOs for disclosure of various informations. The LLA, 2013 is an Act intended to regulate and control corruption in public institutions.

    However, NGOs which are generally private institutions for public purposes, have also been included within the purview of LLA, 2013 under certain specific circumstances.

    There are two important changes pertaining to Section 14(g) and Section 14(h) of the LLA, 2013. The implication of these two changes is as under :
     Any NGO receiving more than Rupees 1 crore grant annually will now be covered under the amended law. The NGOs established and totally funded by the government were in any case covered under LLA, 2013 earlier but now the coverage has been widened.

     Any NGO receiving more than Rupees 10 lakh annually from foreign sources under FCRA 2010 will now be covered under the amended law.

    The law will apply to the functionaries and officers of the NGOs and not the NGOs per se. In other words, the officers and functionaries of NGOs shall have to file annual returns declaring THEIR assets and other prescribed particulars every year under LLA,2013. For the current year all the functionaries and officers have to file the return for the year ended 31st March, 2016 on or before 31st July, 2016.

    If an NGO has received, say, 15 lakh rupees foreign contribution in one year then the law shall apply for all the forthcoming years till the amount is utilised or exhausted. It may create practical problems i.e. a corpus donation will never be exhausted and therefore, the LLA, 2013 will also continue to apply.

    The amended provisions will treat the Director, Manager, Secretary or Officer of an NGO as a Public Servant. According to the provisions of ‘Declaration by Public Servant under Section 44 of LLA, 2013’, he/she shall make a declaration of assets and liabilities in the manner as provided under this Act. The definition of Public Servant will cover Board Members and Senior Employees of NGOs.

    The declaration shall include :
    (i) the name of spouse, minor or dependent children and the position held by them
    (ii) details of cash and bank balances and other moveable properties including
    investment, advances, vehicles, jewellery etc.
    (iii) details of immovable property whether residential, commercial, agricultural or
    (iv) details of loan taken along with the detail of loan provider.

    For the purposes of this section, “dependent children” means sons and daughters who have no separate means of earning and are wholly dependent on the public servant for their livelihood.

    In case where such Public Servant or Director and Officers of NGOs do not make declaration of their assets, it will be treated as an offence and the Lokpal shall have the power to initiate inquiry and even confiscate the assets of such officers.

    The Competent Authority to whom the return shall be filed will be the respective Ministry which has provided the maximum proportion of the grant or donation during the previous year. In other words, in case of government grant the Competent Authority may also change from year to year. In case of foreign contribution received the Competent Authority shall be the Ministry of Home Affairs.

    Further clarified for your quick reference – These provisions are applicable for

    1. Rs one crore Govt Grant AND/OR Rs Ten lakhs Foreign grant through FCRA. Any organization registered with FCRA and obtains Rs ten lakhs foreign grant during the year will be covered under Lokpal even it does not receives a single rupee Govt Grant.

    2. It would include employee directors, CEO, COO, CFO, executive and non executive directors.

    3. Special circumstances, as referred to above, have not yet been defined yet. Let’s wait for further clarification.

    4. This is separate return and Form will be released soon.

    The draconian part is that if you are associated with any NGO in managerial capacity having FCRA registration and receives Rs 10 lakhs as foreign grant you will be treated as Public have to disclose your and your family assets every year as per this return.

    • Jyotsana says:

      If a director left the NGO in April 2015,will he still be liable for filling the return?
      What is the procedure to file the return?How will be the form so filled be filed with the competent authority?Is it the responsibility of the director or of the NGOs to forward the Forms to the competent authority?

      • Subhash Mittal says:

        There is a debate going on this. Since the act became effective on 16th January 2014, will it be applicable from that date or only after the notification has come (20th June 2016). However another notification requires that returns have to be filed as on following dates.


    • Subhash Mittal says:

      Thanks Rajesh ji for a very comprehensive summary.

  7. Kamlendra Singh Rathore says:

    Thanks for guidance

    waiting for your report / guidance regarding the lokpal aspects on NGOs.


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