Applicability of IFRS to S.8 Company

Dear Madam/Sir

We are registered under Sec25 of companies act 1956. Kindly let us know whether sec25 company (NGO’s) have to follow internal financial reporting system (IFRS)?

If yes, then can you share some format relating to IFRS reporting.

Thanks & Regards

Trupti Nahar

Posted in FCRA, TAX, LEGAL | 3 Comments

Backward Integration – Is it really CSR?

Dear All,

Over a million hectare of Tribal lands are in virtual occupation of ITC in Andhra Pradesh, Telangana and elsewhere. They are doing this under CSR ? This backward integration is part of business and is being pushed under the carpet of CSR. Is this fair? Morally? Ethically?Legally?

I got laughter bursting as I read the following in their Web Site. How cunning it is? This fraud upon our Constitution, on our Adivasi communities is an open secret.

Here’s how ITC’s social outreach programme works

The biggest reason for ITC’s CSR success is the way almost all the major sustainability initiatives have been wedded to the company’s core business, either providing an input source for a business or backward integration. As a result, divisional chief executives and their teams lead each of the initiatives, making them something more than just another CSR programme.

For instance, the famed e-Choupal initiative led by the agri-business division is a major sourcing base for the company’s packaged food and FMCG business, while its social forestry programme supports the paper and paperboard business. ITC has, in the last few years, undertaken massive animal husbandry initiatives covering ten lakh milch animals which will form the base for the proposed foray into the dairy business early next year.

There’s more to ITC’s CSR initiatives than these backward linkages. In the last few years, the company has spent considerable money on developing renewable energy infrastructure. And now, renewable energy meets almost 38% of ITC’s total energy requirements which is indeed remarkable considering the huge manufacturing base and hotels. The target is to increase this to 50% over the next five years. All the premium luxury hotels are certified green buildings making ITC the greenest luxury hotel chain in the world.

ITC has consciously chosen the path less travelled. A path that has led it to create sustainable livelihoods for 5 million people. For ITC this is an expression of a commitment beyond the market. Of a conviction that country must come before corporation. Of a true pride in being Citizen First.

What is ‘Corporate Citizenship’
Corporate citizenship is the extent to which businesses are socially responsible for meeting legal, ethical and economic responsibilities placed on them by shareholders. The aim is for businesses to create higher standards of living and quality of life in the communities in which they operate, while still preserving profitability for stakeholders.

BREAKING DOWN ‘Corporate Citizenship’
As demand for socially responsible corporations increases, investors, consumers and employees are now more willing to use their individual power to punish companies that do not share their values. For example, investors who find out about a company’s negative corporate citizenship practices could boycott its products or services, refuse to invest in its stock or speak out against that company among family and friends.

Chatti Mahatma Gandhi Aashramam,
Chatti Post, Chinthur Mandal,
Khammam District, Andhra Pradesh,
Pin Code: 507129.

Posted in CSR | 1 Comment

Marginal Tax Relief: S.12AA registration not to be cancelled

Most of us are aware that charitable institutions functioning under the remainder clause (i.e. advancement of objects of General Public Utility) are always worried that their income from sources which could be treated as from commerce, trade or business should not cross the lakshman rekha of 20% of total income (earlier this was a fixed monetary limit of Rs 25 lakh). If they crossed this limit, Income Tax officers generally would move application to cancel the registration under S. 12AA of such an entity.

CBDT has now issued instructions to all Income Tax Officers vide a circular[1] that in case a charitable institute crosses this limit, then while its income for that year would not be treated as charitable and would be subjected to taxation, however its registration for that year will not be cancelled. Therefore in case, the next year, the income remains within the permissible limit, the entity will be treated as charitable for that year.

The circular also states that above is important so that such one-time taxation of a charitable institution should not result in unintended taxation on accreted income under S. 115TD[2], which could result in additional tax liabilities.

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

[1] Circular No. 21/2016 dt 27 May 2016
[2] S. 115TD not only imposes tax liability on accreted income of any charitable agency whose registration is cancelled, etc. but would also need to pay additional penalty if the tax is not paid within 14 days.
Posted in FCRA, TAX, LEGAL | Comments Off on Marginal Tax Relief: S.12AA registration not to be cancelled

Huge reduction in funds under FCRA

As most of the stakeholders associated with Voluntary Sector had been lamenting regarding shrinking of FCRA funds for the Sector. Now this is confirmed. In a press report based on a RTI application filed by, a media portal, it is now confirmed that FCRA funds for FY 2014-15 were only Rs 8756 crores compared to Rs 13,115 crores during FY 2013-14. A reduction of over 33% of funding.

State-wise most states funding has come down, but Delhi, having a large number NGOs’ Head Offices’ used to be the highest FCRA fund receiver, however it has been drastically come down by more than 50%. Tamilnadu and Andhra are the other two states where FCRA funds have declined significantly.

Considering that many religious organisations are likely to continue to receive funds, even if reduced marginally, the impact is likely to be most pronounced on the organizations working in the social development sector and worse off are likely to be the ones predominantly in the advocacy and human rights arena. Several social development organizations fear this trend is likely to continue for the time being.


Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
e-mail:; website:
Posted in FCRA, TAX, LEGAL | 6 Comments

Applicability of TDS and Service Tax on Project Grants

Dear Dialogue Members,

Ours is a Corporate with over 51% of FDI. We also have a registered Foundation. We release project grants through these two sources to local NGOs. What kind of taxation is involved when we release money to NGOs? TDS and Service Tax.

Thanks & Regards,

R S Sharat

Posted in FCRA, TAX, LEGAL | 3 Comments

How to deal with erroneous Bank Deposits?

Dear Sir/Madam

An FCRA registered organization has erroneously given its FCRA bank account number to a local donor. These funds were to be received as local donation. Effectively, Local  donations are credited to FCRA account (Amounting to Rs.2.88 lacs). What is the remedy. What steps should be taken to rectify the mistake.

Thanking you in anticipation.

Paresh S Sarda
1/1170 Sadashiv Peth
Tilak Road, Pune

Posted in FCRA, TAX, LEGAL | 6 Comments

FCRA Renewal trickling in

Dear Dialogue members,

You will all be glad to know that the FCRA department has started issuing FCRA renewal order for 5 years from 1-11-2016. Some NGOs in our area have already received it. Others are awaiting. The order does not have a signature of the issuing authority and the e-mail from FCRA department mentions that it was digitally signed, but the banks are not accepting it without signature. The order copy has not been marked to the banks directly by the department and the NGOs have been asked to hand over a copy to the bank/s, where they have FCRA account/s. They have also not yet published a list of NGOs who have been issued with he renewal order.

I have written to the Director, FCRA about all these lacunae. Those NGOs who have not yet received the order may constantly watch the official e-mail inbox of the their organisation.

FCRA consultant
Coimbatore, Tamil Nadu

Posted in FCRA, TAX, LEGAL | 6 Comments

PF withdrawal

Dear Sir

Good evening!!!

Please tell me about how fill up15 G form of Pf withdraw.

Vijkendra Kumar

Posted in FCRA, TAX, LEGAL | 2 Comments

Applicability of PF on Volunteers.

Dear Members,

We need counsel about the subject “PF Applicability on Volunteers’ Honorarium Payment. The volunteers are not on rolls and there is no control over their attendance and they work for their village development in association with an NGO for a period of one year. Will that NGO has to contribute towards PF for their payment ranges from Rs.600 – Rs.1200/-? Likewise thousands of volunteers are associated with that NGO.

With Regards,

Prasanna Bollam

Posted in FCRA, TAX, LEGAL | 10 Comments

Any limit for quarterly disclosure of FCRA receipts?

As per FCRA 2010, when an organization receives FCRA funds, the details of the amount and the donor are required to upload into the website of the concerned organization. I would like to know the limit prescribed: for example is it 10 lakh above or any foreign funds?


Posted in FCRA, TAX, LEGAL | 9 Comments