Dear Sir/Mam,
Need your guidance regarding donation from Foreign National (Foreign Passport) doing business in India and having valid PAN card and Aadhar.
Does donation from this person through his/her SBI Account (India branch) be considered a Normal Donation or Foreign Donation (coming under FCRA Act) ? Can an NGO (Section 8 company) not having FCRA Certificate receive such donation ?
Please guide.
Regards,
Vikram Kanwar
We have the same problem with filing FC 6E. We wrote to MHA(FCRA) and got a short response saying “Wait for this”. We will keep writing to them periodically, to show on record that we wanted to comply with the law, but were unable to do so.
Dear sir/madam,
I have a query. We have a socio – religious organisation (Math) for our community (our community is about 25000 people all over the world) and our Math runs many religious and social tasks . All this comes from contributions from the members of the community.
My question is, if a father (Indian citizen and located in India) wants to donate some amount (from his savings in the bank) on the behalf of his children who are foreign citizens, will it attract provisions of FCRA?
Interesting question, a Father can certainly donate out of his own savings. However if it is proved that the child has used father as a conduit to transfer foreign funds. Then FCRA authorities can take action under Section 35 for ‘assistance in accepting’ Foreign Contribution in contravention of Section 11. I presume the Math being discussed here does not have FCRA.
However if no linkage can be proved between amount transferred to the father by child and amount transferred by father to the Math, then there should not be an issue.
Dear Sir. We have uploaded the FC-6E changes Board Members in FCRA online on 3/7/2019. Its showing “Application submitting” Now due to the latest amendment 2 more members have been resigned. To upload the changed new members in the website its showing only “Application submitting” on 3/7/2019 and its not allowing to update. How to update the new members list.
I also have an NGO. Same type of issue. A foreigner donated us 3 lacs through her state bank of india account. she had given us her pan and adhaar card. the bank also credited the same to our account. she had given us money for ration distribution during lockdown. (this was verbally discussed.) we returned her 1.12 lacs of unspent money.(in her bank account)
SO kindly help our NGO.
Dear Mr. Stavya,
I agree with what Mr. Subhash Mittal has said. It is always advisable and good practice to ask for citizenship/passport of any individual before accepting donation to ensure that they are not Foreign donors. Even a person of Indian origin who holds Foreign Passport is a foreign donor irrespective of what currency he/she makes donation. A foreign citizen making donation in Indian rupees through and Indian Bank account is also a foreign donor and the donation will be foreign contribution.
Dear Mr. Vikram Kanwar,
In your case the donation is an FC donation and there has been a violation under FCRA. This might be flagged by your auditor in their audit report.
Please note that as per amended section 12 AA, one of the grounds for cancellation of the registration is non-compliance of the trust or institution to requirements of any other law which is material for the purpose of achieving its objects.
I advise you to please return all the money to the donor at the earliest. There is chance that your auditor could qualify this in his/her audit report. Advice you to please check with your auditor (I am assuming that your financial statements have not been finalised for 20-21 and this money was received in 20-21) if you can treat this as a liability and not income and then adjust the liability with the money returned. By doing this you won’t be reporting foreign income, and by returning the amount within this financial year there will be no liability shown in your balance sheet at the end of the financial year. However your bank statements will reflect the receipt and payment of this amount and the utilisation. Your auditor would be in the best position to advise you on this issue and the repercussions if any if income tax officers scrutinise your receipts.
Best Regards,
Ritesh
Dear Ritesh,
Thanks a lot for such a detailed response.Based on your and Mr. Mittal’s clarification we did not accept the donation / money.
The procedure for return as you have outlined would be helpful to Mr. Stavya.
Thanks once again.
Regards,
Thank you Ritesh Ji. I discussed it with the CA and he agrees to the solution given by you. Thank you again
I also have an ngo. Same type of issue. A foreigner donated us 3 lacs through her state bank of india account. she had given us her pan and adhaar card. the bank also credited the same to our account. she had given us money for ration distribution during lockdown. (this was verbally discussed.) we returned her 1.12 lacs of unspent money.(in her bank account)
we also do not have fcra certificate. please tell what should we do now. shall we return remaining amount. in this way we would have returned the entire money received from the foreigner. we are a very small ngo and do not want any legal hassle. Please guide us.
Foreign Contribution is defined as ‘any donation, delivery or transfer made by any foreign source. So irrespective of from where the money is coming, if donation is from a foreign citizen, it will be treated as FC. PAN & Adhar does not create citizenship, i.e. just ID proof. A foreign citizen making donation from Indian sources too is regarded as Foreign Source.
Dear Mr. Mittal,
Thanks a lot for the clarification.Based on your advise we did not accept the donation / money.
Thanks once again.
Regards,
Vikram