Tax Treatment of Funds Accumulated

Our NGO has saved non-specific donations in FDs for a ‘rainy day’. Some have exceeded 5 years and we are now told that we have to pay 45% in taxes for under-utilization of funds and if we delay the process it will be 90%. How are we supposed to be self sustaining if this is the case?

Aziza Tyabji Hydari

Posted in FCRA, TAX, LEGAL | 9 Comments

Treatment of assets on completion of FCRA projects

Dear Members,

In a Society registered in Lucknow under the Societies Registration Act 1860 some assets have been purchased in projects under FCRA . On completion of the project the society has been allowed to retain these assets by donors. What would be the treatment of these assets in the books of Society and how is it to be presented in the balance sheet of the Society as a whole.

With Thanks & Regards

CA Rajeev Sharma
B.Com. F.C.A.D.I.S.A.(ICA)
Rajeev Siddharth & Associates
Chartered Accountants
308 Sahara Shopping Centre
Faizabad Road
Lucknow 226 016

Posted in FCRA, TAX, LEGAL | 3 Comments

CSR Funds Foreign or Local

Dear Members,

We are an NGO working on sustainable energy, sustainable agriculture and waste management. An Indian company with 53% foreign holding is offering funds to one of our projects. Please advise whether do we need to treat this as foreign contribution or as an Indian contribution?

Best Regards,

Vidya Sagar Devabhaktuni
President, SKG Sangha
“Mandara” 3rd Main,
Muneshwara Nagar, Antharagange Road
KOLAR – 563 101
Karnataka State, INDIA

Posted in FCRA, TAX, LEGAL | 1 Comment

US Citizen in a Board of Society

Dear Members,

A Society registered in Delhi under the Societies Registration Act 1860 likes to know whether it can have a person of Indian origin with USA citizenship on the Governing Board as an Institutional Representative.

The individual is Chief Functionary of an another Institution registered in India as a Trust that is also registered in the USA according to their own statutes The Individual lives in both the countries from time to time.


Vijay K. Sardana

Posted in FCRA, TAX, LEGAL | 3 Comments

Can foreign nationals work as volunteers on a tourist visa

Dear Dialogue members,

A number of foreign nationals come on a tourist visa and besides sightseeing thye work as volunteers in many NGOs. No payments are given to these volunteers. Are they allowed to work as volunteers on a tourist visa.


Dr Kumkum Srivastava
Public Health and Education expert

Posted in FCRA, TAX, LEGAL | 7 Comments

Hiring of Foreign National

A foreign consultant needs to be hired for a professional assignment for a FC based project in India. Kindly clarify on the following:-

  1. Whether his remuneration and out of pocket expenses can be paid out of the FC funds
  2. What approvals are required, if any, relating to his appointment and payment of remuneration and other expenses?

Warm Regards

CA Sharad Kabra

Posted in FCRA, TAX, LEGAL | 2 Comments

Danger of loosing outcome of 2011 anti-corruption movement

As the NGO functionaries recover from the almost ‘panic like situation’ in the Sector, there is an urgent need to examine and understand, did we become tools in the hands of the bureaucracy cum executive combined. Need to understand what has transpired so far

  • On 20th June 2016 Govt notifies S.14 (g) & (h) making it mandatory to file assets & liabilities return by functionaries of NGOs.
  • Understandably the Sector goes in overdrive trying to understand the implications as well as lobbying to have the requirement delayed.
  • Govt brings hastily prepared Lokpal Amendment Bill 2016 in the parliament on 27th July and has it approved in both houses of parliament, within two days of presenting the bill.
  • The Govt does not make any effort to pass the Lokpal Amendment Bill 2014, which has been pending in parliament since Dec’2014 mainly to allow Leader of the largest party in Parliament in lieu of Leader of Opposition for selection of Lokpal, clearly indicating that the Govt has little interest in putting in place the Lokpal Institution.
  • Lokpal Amendment Bill 2016 authorizes Govt to comprehensively prescribe the ‘form and manner of declaration of assets & liabilities by the public servants’
  • Thus in one stroke, the govt has taken the power in its own hands of the entire process which was defined in the Act : what to be declared, how often to be declared and how govt will deal with this information so declared. Earlier Act required the information to be declared within 30 days of appointment, and thereafter every year by a declared govt functionary, PM, ministers and MPs and to make it public.
  • All this without giving any relaxation to the NGO functionaries, who still remain defined as public servant (S.14 (g) & (h)) and have to file the returns after the govt decides the format. All the Govt has done is given extension to 31st December 2016, which in any case is applicable to all public servants.

Thus using the anxieties of the NGO Sector to its own benefit, the bureaucracy has taken in its own hands how and what needs to be declared. Major outcome of 2011 anti-corruption movement seems to be in danger of getting lost in the legal / bureaucratic maze.

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

Posted in Accountability | 5 Comments

Amendments in Trust Deed

Dear Members,

Please let me know the procedure for amending the Trust deed. Whether Income Tax department permission is mandatory? The proposed amendment is only for Trustees re-appointment and sale of building.

Looking forward to your valuable advice.



Posted in FCRA, TAX, LEGAL | 3 Comments

Applicability of Labour Laws in Maharashtra

Dear Members,

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,


Posted in FCRA, TAX, LEGAL | 1 Comment

Deadline for filing of Return under Lokpal extended indefinitely

Deadline for disclosure of assets and liabilities by central government employee and senior management personal of NGOs receiving government aid and foreign donation has been extended indefinitely.

The government brought an amendment to Lok Sabha after receiving number of representation made from NGOs, Civil Society and other stakeholders expressing concern over provisions in the Lokpal Act which could adversely affect the NGO sector. The Amendment pertains to Section 44 of the Lokpal Act which deals with declaration of assets and the provision of making assets public.

As per the article published in The Indian Express, Government is open for the suggestions to keep the spouses of government servants and NGOs out of the ambit of the bill. It will also depend on the recommendations of the Standing Committee.

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

Posted in FCRA, TAX, LEGAL | 10 Comments