Dear Sir,
Your workshop on DTC & FCRA is very useful and gave an intro to the amendments in both. I attended the workshop in Chennai and thankful to you for making the day 100% useful.
Now many online international platforms are willing to mobilise donations for the ngos and transferring the foreign exchange to us. While some transfer the money to our bank accounts, few others talk of Pay pal accounts and e-LS international accounts for fund transfers. Is this legal? Can you kindly clarify the same.
With regards
—
F. Beatrice Vanaja,
Chief Administrative Officer,
New Life,
No: 7,3rd Cross, 5th Main Road, Srinivasanagar,
Land Mark:Next to Bishop heber College, Puthur,
TRICHIRAPPALLI-620017.
Phone: Office: 91-431-2782726
Fax: 91-431-2770199
Dear Father Beatrice Vaneja,
It may be stated that the following suggestions have been given for general awareness of SRRF Dialogue memebrs and do not form any contractual relationship between the opinion giver or the person/s receiving these information or taking action based on the same.
First of all my apologies for rather delayed response.
Very frankly I am not fully aware how Pay-pal or e-LS works. My understanding is that if you open a Pay-pal account, the funds that you receive as donations are kept safe in an account and subsequently either you can transfer to your normal bank account or pay out of that fund for any obligations that you may be having. While Under FCRA we have no obligations towards the same, however the facility is also being used by exporters. RBI which is responsible for Foreign Exchange Management Act, has come out with a circular in this regard. It has limited that transactions in such accounts to $500. Further debits would be allowed only for very limited purpose.
Only Authorised Dealer Category I Banks have been allowed to deal with such accounts. They can enter into arrangements with such Gateways to regulate these transactions and only ensure that authorised debits are allowed in this regard.
Considering the strict way in which RBI has taken for such accounts, my suggestion in regard to FCRA would be that to the extent possible such accounts should be discouraged. However if you find it is essential for you to open such accounts to generate funds, my suggestion is that please transfer all funds that you receive in such accounts to your FCRA accounts. Please make sure you have complete identity of donors, otherwise there is a risk that these donations under Income Tax Act may be treated as Annonymous Donations.
My strong advise, being a new development, please tread carefully so as not to violate FCRA, since violation of FCRA could subsequently result in non-renewal of FCRA registrations.
Hope if the above does not provide direct answer, provides some guidelines for you to better understand the issue.
rgds
subhash mittal