Inconsistent Income Tax Orders – Need Clarification

Dear Members,

We (Nettur technical training foundation) is a registered not for profit organisation registered with Income tax commissioners and covered under section 11 and 12 of the IT act.

With respect to our assessment we have different views taken by different assessing officers.

As per the act we presume that 85% of the gross receipts should be spent on capital and revenue expenses to avail full exemption in a financial year.

  1. For one year both capital and revenue expenditure and depreciation was allowed for arrive at 85%.
  2. Next year depreciation was disallowed ( a clarity on this was given in the finance act 2014 , stating depreciation will not be allowed)
  3. In the next year the gross receipt was clarified as cash basis and not on mercantile basis.
  4. Now we get an assessment order stating that the 85% should be on net profit before depreciation and not on gross receipt ( reason stated by the assessing officer is that there is a departmental circular to this effect)

The subject is rather leading to confusion year after year.

Kindly give your opinion and views.

Regards
Louis

Posted in FCRA, TAX, LEGAL | 5 Comments

FCRA Renewal

As intimated earlier through SRRF Dialogue, FCRA renewal for certain FCRA registered organisations are due, a Table is given below to help identify Due Date for renewals.

fcra_renwalAlthough when the FCRA Act was made effective, FCRA Dept had explained that the application would need to be submitted online, however since the Dept has not put this application online, it is suggested that based on above dates FCRA Renewal application should be submitted.

PROCEDURE:

  • Application Form – FC5 can be downloaded from the FCRA website. For convenience a copy can be downloaded from SRRF website. Click Here
  • Fill the form.
  • Attach copy of original FCRA registration certificate.
  • Advisable to attach copy of any approvals taken for change of address, change of bank account, change in trustees, etc.
  • Attach a Demand Draft or Banker’s Cheque of Rs 500/- in favour of ‘Pay and Accounts Officer, Ministry of Home Affairs’. The DD / banker’s cheque should be payable at New Delhi.
  • Send all the above documents, properly indexed and under a cover letter on the Letterhead of the Association by SpeedPost to The Secretary, Ministry of Home Affairs, FCRA Wing / Foreigners Division, NDCC-II Building, Jai Singh Road, New Delhi 110001.
  • Please retain the receipt of dispatch as well as one complete copy of your renewal application.

SRRF has a Helpline to help organisations who face problems in applying. Helpline No. is 9350184168.

_____________________________________
Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
e-mail: socio-research@sma.net.in; website: http://www.srr-foundation.org

Posted in FCRA, TAX, LEGAL | 2 Comments

Registration Documents Under Indian Trusts Act

Hello,
My name is Uma and I am writing on behalf of an educational NGO based in Chennai. We have been operational since 2007 and we are providing Montessori education to the under priviledged children by adopting the local balwadis.

As we are looking to expand, we are looking for external resources for funding and the first question which comes up is the registration certificate. The trustees of this organization executed the trust deed on non-judicial stamp paper and we do have the copy of the trust deed. We are also registered under the section 12AA of income Tax and getting 80G exemption as well since 2008.

Now we applied for the FCRA application and the lawyer is saying that the trust is not registered and asking for the registration certificate.

1. Is execution of the trust deed on stamp paper not considered as registration ?
2. What is the registration certificate ? how do I find this ?
3. If we need to do the registration, will our history of the work be considered for evaluation ?
4. Is there a way to find out whether our trust is registered ? if so, where ?

Can somebody provide a clarification on this ?

Sincerely,

Uma
Nishkam Chennai

Posted in FCRA, TAX, LEGAL | 10 Comments

Does the allocated fund to CSR lapses in case the organization could not spend in the year.

Dear Members,

Does the allocated fund to CSR lapses in case the organization could not spend in the year. If no than, can it be used for next year. Under which Government order this is clarified?

Looking forward to your support.

Thanks,

Vikas

Posted in CSR | 1 Comment

Change of more than 50% Board Members

Dear Friends,

Under the provisions of the FCRA 2010, any change in the Board members in excess of 50% shall be made with prior permission. This does not technically apply to organizations registered prior to 27th December 1996 as there was no declaration signed by the organization this effect while applying for registration.

The query/doubt that I have is that the prior approval for the nomination of Board members is to be sought when the 50% change occurs “over a period of time” or “at any given point in time”.

Thanks and regards,


B V Soma Sastry

Posted in FCRA, TAX, LEGAL | 8 Comments

Can Section -8 company further sub-grant to another NGO

Dear Members,
An FCRA registered NGO gives a grant to a section 8 Company in India. Can the section 8 company further sub-grant funds to another international NGO for implementing program in India through a company?
Thanks,
Rajesh
Posted in FCRA, TAX, LEGAL | 8 Comments

A Trust whose objects include ‘international welfare’ cannot be denied S. 12A registration

In a decision by Income Tax Appellate Tribunal (ITAT), Mumbai it has been held that a Trust whose objects include ‘international welfare’ is a charitable entity and cannot be denied S.12A registration.

DIT (E) who rejected the application for S.12A registration of the Trust in its order had contended that Critical Art & Media Practice’s (to be referred as Trust) objects include charitable as well as non charitable activities, such as hosting of artists-in-residence programmes for international artists and raising funds for organizing trips, seminars and conferences within and outside the country. Considering S.11 applies only for income to be applied for charitable purposes within India, the Trust cannot be given the tax exemption status.

The trust filed an appeal before ITAT (Mumbai) against the Order. The Tribunal divided the issue into two parts, one for examination of charitable activity and second applicability of tax exemption (S.11) on the same. It after examining the case, held that while it is true that the objects of the Trust are such that it may apply some of its income outside India, however the test of an entity being charitable has to be based on definition of ‘charitable purpose’ under S. 2(15). It stated that this definition nowhere states that any activity undertaken by a Trust outside India is not a charitable activity. Thus even if an entity applies its income on welfare activities outside India, its charitable purpose needs to be seen in light of definition given under S.2(15).

It further stated that in case the Trust applies its income on objects which are outside India and if not authorized by CBDT that expenditure would not fall within the definition of application of income under S.11 and would need to be dealt accordingly.

– Citation : ITA No.736/M/2013 2 M/s. Critical Art and Media Practices vs DIT(E) dt 15 Mar 2015

___________________________________
Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
e-mail: socio-research@sma.net.in

Posted in FCRA, TAX, LEGAL | Comments Off on A Trust whose objects include ‘international welfare’ cannot be denied S. 12A registration

Donation from NRI

Can any FCRA registered NGO receive donation from an individual/person who is working abroad having NRE account in India? If yes, what are the terms and conditions will apply to the NGO who will receive the donation and person who is donating?

Please advice.

Thanks,

Randhir

Posted in FCRA, TAX, LEGAL | 6 Comments

MHA cancels registration of 1142 NGOs

Ministry of Home Affairs has cancelled the FCRA registration of 1142 organizations from Andhra Pradesh undivided) vide a cancellation order dt. 3-3-2015. It has stated that these organisations have not filed their Annual Returns from 2009 to 2012.

Among the well known organisations whose registrations have been cancelled include Osmania University, the University of Hyderabad, Andhra University in Vishakhpatnam. The Home Ministry has also cancelled the FCRA license of Cancer Care Units Research and Educational Foundation of Apollo Cancer Hospital at Jubilee Hills in Hyderabad. For complete list click here

The Dept had sent individual notices to 1441 organisation in the State, out of which responses came only from 299 cases. These cases are being examined. However the rest of the cases, where either the notice was returned (510 notices were returned undelivered) or where no response has come, registrations have been cancelled.

Obviously AP is the first state where the Dept. has taken action and it is quite likely that similar action could follow in other cases too. Infact SRRF analysis as posted earlier (see http://blog.srr-foundation.org/?p=2299) indicated that out of 39,087 registered entities more than 50% had not filed annual returns for FY 2013-14.

All registered organisations should ensure that their annual returns are upto date to avoid any hassles.
___________________________________
Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
e-mail: socio-research@sma.net.in

Posted in FCRA, TAX, LEGAL | 9 Comments

Is there any restriction on amount of donation by an individual against 35 A/C

Dear Sir,

I have a following query:
any idividual can donate any amt under 35 AC but whether
a businessman /partner/proprietor of a firm after taking 100% exemption upto
his limit on investments like ppf etc can over & above this also donate to
a NGO having 35 AC exemption any amt he wishes and avail of 100% tax exemption?

Pl reply immediately as it is a query of our donor.

Thanks & rgrds for your wonderful service.

Devendra S. Desai
Founder/Mg. Trustee

Play Together,Stay Together
Devendra S. Desai
Vandana Sonawane
Team CTF
Children Toy Foundation
C/O R.Desai & Co,Modern House,11,Dr. V.B.Gandhi Road,Fort,Mumbai-400001

Posted in FCRA, TAX, LEGAL | 8 Comments