Utilization of grants/donations received

Posted on May 2, 2014 by SRRF

Dear Sir

I wanted to know if there is any notification /guideline (other than income tax requirements) regarding full utilisation of grants/ donations received by an NGO. This assumes importance in view of the CSR provisions of Companies Act 2013.

Many thanks and regards

Joy Jain

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One Response to Utilization of grants/donations received

  1. Subhash Mittal says:
    May 8, 2014 at 6:45 am

    Dear Joy,

    I am not sure what you have in mind in regard to the words ‘full utilisation of grants / donations’ rec’d by NGO. As far as CSR is concerned, it talks of expenditure, how one would define expenditure is an accounting policy issue. For example, certain organisations treat grants given as utilisation, while others only treat a grant as utilised only when a audited Utilisation Certificate is rec’d. It is for organisations to decide what kind of accounting policy they would adopt, of course if ensuring accountability is the principle of the accounting policy, then the latter accounting treatment would be more appropriate.

    Under Income Tax, the legal framework requires that all NGOs must have spent 85% of the funds for the organisation to qualify for Income Tax reliefs.

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