Dear Sir,
When we receive grant for some specific program, it comes with a condition that any interest earned on the said grant should be treated as donor grant fund only. I have two queries on this:
1. Will the interest earned be treated as income for the year or added to un-utilized grant fund.
2. what is the best way of calculating the interest earned on each grant? We use monthly average method. Is this acceptable. B’coz, in one FCRA account, we use to have more than one donor fund and also donations.
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Thanks & Regards
Pragya
Team Leader-Accounts
Villgro Innovations Foundation
III Floor, IIT Madras Research Park Building
Kanagam Road, Taramani,
(Behind TIDEL Park),
Chennai – 600 113
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Dear Valan,
Greetings from Hyderabad!
I agree with you to the extent that FCRA 2010 pertains only to FC and is monitored by the MoHA. The LC funds will be spent as per the IT Act. This is fine. But what we need to understand that any “Association or company engaged in broadcast of audio or visual news” is prohibited from accepting FC. This is irrespective of whether the activities are implemented using FC or LC funds.
Thanks and regards,
B V Soma Sastry
Dear Pragya,
It may be stated that the following suggestions have been given for general awareness of SRRF Dialogue members 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 sorry for delayed response. I have been travelling a lot and often there are connectivity issues.
Your first question does not have a simple answer, since it depends on a number of factors, as you yourself state donor agreement is one, others could be accounting policies of your organisation. Accounting issues would be rather different and would depend upon case to case basis. However it is important to clarify that despite accounting issues, as far as FC Annual Return is concerned it will be shown FC and should be disclosed as receipt of FC. Thus even if you are crediting interest to grant account of the donor, it still must be disclosed as FC.
Regarding calculation of interest, what you are doing should be acceptable, as monthly average method seems quite reasonable. Please ensure whatever method you follow, it should be followed on a consistent basis.
warm rgds
subhash
Thanks a lot sir for your response
Dear All,
As per the FCRA 2010, “Section 3 of FCRA 2010 specifies that the following persons cannot receive foreign contribution:
(a) candidate for election.
(b) correspondent, columnist, cartoonist, editor, owner, printer or publisher
of a registered newspaper.
(c) Judge, Government servant or employee of any corporation.
(d) member of any legislature
(e) political party or office-bearer thereof.
(f) Organisation of a political nature.
(g) Association or company engaged in broadcast of audio or visual news.
(h) Correspondent, columnist etc. related with the company referred in clause(g)
It is important to note that the clause(g) above prohibits an organizations engaged in broadcast of audio or visual news from receiving FC funds. Does it mean that the organizations cannot even engage in activities specified in clause (g) from local funds? This is a serious concern. Would request feedback from the group.
Thanks and regards,
B V Soma Sastry
Dear All,
Greetings,
FCRA-2010 only for foreign money only .any body can spend indian money for Clause-G
Regards,
Valan
Dear Valan,
If you look into Section 3, it lists persons who cannot receive FC. This includes clause G. My interpretation is that organizations involved in activities of (g), cannot receive FC even if the activities are implanted using LC.
Regards,
B V Soma Sastry
Dear Soma,
Greetings,
FCRA-2010 act for only Foreign contribution money.The act is not saying about Indian Money .For the Indian money using we have have follow the our Income Tax Law.
Regards
Valan