Dear Members,
We have received FC fund in SBI FCRA designated accounts.
We transferred the fund to FCRA Utilisation account (other bank).
Can we be allowed to make FD from FC utilisation Bank accounts in different banks for earning higher interest income?
Thanks
Amar
Some NGO treat ” Grant utilised ” as Grant Receipt/Income in both – Financial statement and in ITR.
They do not show Grant Received as Grant receipt/ income.
Is it the correct way as per income tax act ?
You have correctly mentioned that there are three types of accounts allowed under FCRA. ‘Designated FCRA A/c’ (in SBI) – Only in this account you can receive FC. ‘Another FCRA A/c’ – This account has been permitted to transfer funds to Utilisation A/c, create FDs, etc. Main purpose of this account is that in case any organization faces any difficulties in running its operations from Designated A/c (which is located at New Delhi), it can operate through another FCRA A/c. Main purpose of Utilisation A/c is to utilise funds. There should not be any other credits in this account. Generally it is opened for convenience (say if project is at a location other than where organisation ‘Another FCRA A/c’ is located). Hence one should avoid opening of FDs from Utilisation A/c, however if you have to open, please ensure FD is linked to the Utilisation A/c.