Is Repair and renovation of house allotted to an senior employee from CSR fund valid?

Dear Sir,
Is Repair and renovation of house allotted to an senior employee from CSR fund  valid ?  Should we treat  it as CSR project cost or to be treated as Admin Cost of that  particular CSR donor. As per CSR rule 5% admin is allowable. Pl suggest.
Ashok Mishra
SNS Foundation
Posted in CSR | Tagged | 1 Comment

Is it necessary to have original FCRA letter?

Greetings from AMIN trust Chairman

Dear friends
May you please write to me regarding FCRA permission letter from MOHA. We have registered trust from DELHI and had applied for FCRA  on 19th April 2014. It was November we went to J&K for relief work and there was no body in our Delhi office.
Ministry of Home Affairs FCRA department had sent a FCRA permission letter to our office.Since there was no body in the office,the post man didn`t deliver and was sent back to FCRA department. Which we came to know just two days ago from the post man.
Other hand,FCRA Department has sent one FCRA permission letter to the bank also where we have opened FCRA account.The Manager of the bank gave us a photocopy of the same letter the bank has received.In a letter FCRA registration is mentioned that means we are permitted FCRA.And I found our trust is permitted fcra registration from the website also.
Here my quiëry is  that “Is it necessary to have original FCRA letter that we supposed to receive from the post office from Ministry of Home affairs FCRA department or just knowing FCRA registration number and having its photocopy for our record? “
Please circulate this and write us fair reply.
Hope to hear from you all.
Nazir Ahmad
Amin Social Welfare Trust
Posted in FCRA, TAX, LEGAL | Tagged , | 5 Comments

Cancellation of S.80G certificate – Court decision

A series on Impact on Taxation of NPOs due to hardening of tax authorities’ attitude……(1)

We are increasingly finding situations where the Dept. is denying charitable status to various running NGOs by cancelling S.12AA & S.80G. We start a series from today highlighting some major decisions taken by the courts on these issues, most of you would find it of interest, considering it has a direct impact on taxability of NGOs.

In today’s edition we share a case, where the NGO concerned leased some of its surplus land to a commercial organisation having common directors, due to which tax authorities did not renew its S.80G certificate and even cancelled S.12AA. Ashoka Education Foundation while running school gave leased part of its surplus land to another organisation on rental purposes. The authorities alleged that the letting out of land to a commercial organisation for installation of RMC Plant on its land amounted to commercial activity. It further stated that the since there were common persons on the Board of the company to whom the land was let out and that of the charitable organisation, which means benefit had been given to persons covered under S.13(3) and hence it should be denied S.80G registration and its S.12AA registration cancelled.

Income Tax Tribunal (Pune) in its order stated that CIT while renewing the application for S.80G needs to verify if Charitable institution was undertaking the charitable activities as covered under its objects. Merely if some part of its land, it has let out on commercial basis does not mean that the entity is no longer undertaking the education / charitable activities as specified in its objects.

The judgement further stated that even if CIT has established that there was benefit given to persons falling under S.13(3), that will need to be considered at the time of tax assessment for that particular year by the assessing officer. Thus the charitable organisation cannot be denied S.80G registration if it is undertaking the educational & charitable activities as specified in its objects. It also declared S.12AA cancellation null & void, since the assessee was not given sufficient opportunity to defend why the same should not be cancelled. [citation: Ashoka Education Foundation v CIT (ITAT-Pune) 2009]

Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
e-mail:; website:

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Admin Expenses under CSR

Dear Sir,

We have a query from a Corporate partner on whether they can pay a registered charity organisation, its 10 per cent administration fees to run the projects, because the recent CSR bill caps administration expenses to 5 per cent.

As we understand the current CSR rule. Provision of administrative expenses of 5 per cent in the recent CSR rule is been made to enable corporates to build their internal capacity  and / or consult with for profit organisation for CSR strategy / implementation plans etc. Once the corporate donate its 95 per cent CSR funds to a registered charity organisation, the registered charity organisation can charge 10 per cent admin fee from / within the 95 per cent donation received from the corporate to run the project. This does not violate the 5 per cent administration expenses clause of CSR rule.

Please do share your views on the same.

Thanks and regards,


Posted in CSR | 1 Comment

Is section 50C applicable while calculating net consideration u/s 11(1A)?

As per section 50C of income tax act, if the consideration receivable on transfer of land and building is lower than the stamp duty value than such stamp duty value is to be considered as consideration for calculation of capital gain.

As per section 11(1A) of the act, if any capital asset is sold by the society than capital gain is taxable in the hands of socity provided that the net consideration on transfer of such asset is not invested in procurement of another asset.

Now the question is to take stamp duty value for calculation of capital gain in case of society or not?

Rahul Gupta

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Ten FC Donors Under Prior Permission

For quite some time, Indian banks have been asked by RBI to refer some international remittances to FCRA Wing. The RBI has now issued a general circular on this. Remittances from following donors are subject to prior-approval from Ministry of Home Affairs:

  1. Danish International Development Agency (DANIDA)
  2. Danish Institute of Human Rights (DIHR)
  3. Catholic Organization for [Relief] and Development Aid (CORDAID)
  4. Dan Church Aid (DCA)
  5. Mercy Corps, USA
  6. Inter Church Peace Council _ Pax Christi (IKV- PC) , Netherlands
  7. HIVOS, Netherlands
  8. ICCO Stretegische Samenwerking (ICCO), Netherlands
  9. Green Peace International
  10. Climate Work Foundation (CWF), US

If you are receiving funds from one of these donors, be prepared for long delays in credit of the funds to your accounts.

Ref: RBI/2014-15/408 DCBR.BPD (PCB/RCB) Cir.No.13/14.01.062/2014-15 dated January 15, 2015; Available at

Source: AccountAid

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Is Income tax Paid treated as application of Income?

As per section 11 of the income tax act, an organization is required to apply 85% of total receipts during the year. However it couldn’t be applied during time limits mentioned in the relevant section of the act and accordingly tax was paid on such underutilized amount.

Now my query is whether such income tax paid shall be treated as application of income during the year in which it was paid?
Posted in FCRA, TAX, LEGAL | 3 Comments

Do any organization is required to file returns if it has received FCRA funds by Prior permission/ prior approval?

Do any organization is required to file returns if it has received FCRA funds by Prior permission/ prior approval?


Posted in FCRA, TAX, LEGAL | 3 Comments

Relief to NGOs – a decision by Chennai Income Tax Tribunal

Recently Chennal Income Tax Tribunal has given a judgement reversing the Income Tax Dept.’s order of cancelling an NGO’s (SAE India) section 12A registration because it has crossed the threshold limit of income (currently Rs 25 lakhs) under S. 2(15).

As many of you would know that under S.2(15) of Income Tax, an NGO whose objects falls under ‘the public utility clause’ income is currently limited to Rs 25 lakhs. Several Inocme Tax officers interpret this as that S.12A should be cancelled once this limit is crossed. This as per the judgement is a wrong interpretation.

The Honourable ITAT observed that assessee’s objects and activities (to serve as a forum where Engineers, Scientists, Technologists and Innovators in mobility engineering field can exchange ideas and learn from each other experience) are genuine and registration cannot be cancelled merely because receipts are exceeding the threshold limit.

It further opined that the IT Officer in case the limit u/s 2(15) exceeds the threshold amount than s/he has a right to levy tax in respect of these receipts but not to cancel the 12A Registration, which can be done only if the activities are not for general public utility.

We have provided the details of the above case, it may be possible that a number. of NGOs may be facing similar situation they can rely on this case to get the necessary benefit.

Citation :SAE India v/s DIT(E) (ITAT Chennai), I.T.A. No.386/Mds/2012, 17th October, 2014 

Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
e-mail:; website:

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Smart City Means

Dear Friends,
Wish you all Happy Sankranthi / Pongal!

Smart Cities should satisfy certain basics without which other smart elements established at whatever cost would not be sustainable. The Central Smart City -project plan should detail the strategies to achieve the basics and other smart elements.

Some CSOs are reported to be working on the subject issue and awaiting the 100 smart city-project plan to be released by the U D M shortly.

It should be recognized that every City, smart or otherwise, forms part of a watershed / River basin. No activity within the Cities should affect the ecology of the downstream areas. Proper resource and effluent / waste management is a must for environmental and ecological health within and downstream side of Cities.

The basics:
The interests of slum dwellers, migrant workers, safety of women and children, affordable good quality drinking water, affordable and effective health care and education for all, nutritional security through efficient PDS  to support urban poor, quality-up gradation of Government and Municipal Schools, opening many more Central Schools and Polytechnique colleges…..

Most importantly gender justice and child rights are well taken care of.

In a smart city, all the traditional Tanks are rejuvenated, pollution of every kind is zeroed and at least 20% of the smart City is under green cover.

Other important elements:
Segregation of domestic waste right at home into different colored bins (bio-waste, recyclables such as paper/card board/packaging, rigid and flexible plastics and non-recyclables for safe disposal) world class waste collection system and transportation of the same directly to the recycling units. Special system for hazardous waste (Chemicals / medicines, CFLs, glass, electrical and electronic items, mobiles and related accessories, old air conditioners, refrigerators, water / Air coolers, etc.) collection and transportation to recycling units should be given priority – Reduce use of resources, Recycle and Reuse.

Domestic energy and water efficiency:
Interest free loans on attractive repayment terms for replacing the old inefficient electrical and gas based appliances.

Well trained teams for enhancing domestic energy efficiency to visit every home  for suggesting appropriate measures (Mummy ho ya daddy ho….Ad is in the right direction – catch children and the youth !) Educate school children and college youth on resource and waste management as part of compulsory general education.

Low flow rate – tap heads in kitchens, wash rooms and domestic gardens and garages for drastically reducing water wastage.

Recharging groundwater in cities, roof rain water harvesting  and efficient storm water drainage system should be prioritized.


Most of the above mentioned measures form the joint responsibilities of the Citizens / Corporates / Municipalities / State and Central Governments.

Transportation, power and building (individual / businesses / Industries / establishments  etc,) sectors and e- governance that make a City smart need to be addressed separately.

Civil society need to address the subject issue on a priority basis before our Governments finalise things.


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