MHA has amended the Foreign Contribution Regulation Rules, 2011 through a notification issued on 22nd September 2023. Through this notification MHA has revised the FCRA Annual Return (Form-FC4). Currently details of purchase of fresh assets purchased are required to be provided para 3b.
Now the new paras 3ba & 3bb in the Form of Tables have been added.
Table under 3ba requires that movable assets procured (like: computers, furniture, office equipment, vehicles, etc) are now to be disclosed giving following details:
- Description
- Value of movable assets at the beginning of the year
- Value of assets acquired during the year
- Value of assets disposed of during the year
- Value at the end of the year (should match with the Balance Sheet)
From above it does appear that one need not give details of individual assets, but only category-wise details of assets that have been capitalized during the year.
Table under 3bb requires that immovable assets acquired as at year end be disclosed under this Table.
In both cases, details of assets as at year end has to be provided, that means in case of immovable property each property has to be mentioned, which for movable assets category-wise details of assets brought-forward as well as acquired and disposed during the year have to be provided.
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Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008
Is it applicable to assets purchased out of Foreign funds received or entire assets.
Applicability of FC4 is for FCRA funds only and not local funds. So whenever you are filing FC4 or Annual Return, as generally called, please ensure that your responses are in context of FCRA funds only.
MHA has amended the Foreign Contribution Regulation Rules, 2011 through a notification issued on 22nd September 2023. Through this notification MHA has revised the FCRA Annual Return (Form-FC4). Currently details of purchase of fresh assets purchased are required to be provided para 3b. Now the new paras 3ba & 3bb in the Form of Tables have been added.
Kindly suggest us that it is applicable for the FY 2022-23 or onwards next FY 2023-24.
Looking forward to your early and prompt response in this regard
With best regards,
Please see the comment already answered in response to a similar query to Shri Gyan Chand Jain under this thread only.
Many NGOs write off expenses on Fixed Assets as expenditure against donor grant. In such cases, there is nothing on Balance Sheet to match. What should such NGOs do? No opening balance, no closing balance and in fact no purchases booked under Fixed Assets.
Most NGOs who charge capital expenditure under Project Expenditure during the year, also have a policy of capitalising assets by creating a capital reserve. This policy is also suggested under Technical Guideline for Accounting for NPOs issued by ICAI (see para 114 of the Technical Guidelines). Such a fund is treated as Deferred Revenue fund, and depreciation charged on such assets is transferred to Income & Expenditure Account.
Thus, all NPOs should maintain assets in their Balance sheets, whether created out of own funds or grant funds.
Is this applicable for the previous financial year 2022-23 or it will be applicable for the current financial year i.e., with effect from FY 2023-24
This is a difficult question to answer, since the Notification has been made effective from the date of publication, which is 25th September. Since the changes have been made in the Form FC4 (Annual Return), any FC4 filed after this date should be filed using the amended return. Thus if you have not filed your return before this date, please use the amended FC4, as and when it becomes available on the FCRA website.
What about organisations who have already filed their returns. Really not sure. Legally they are not required to file the amended return, since the amended FC4 was not applicable when they filed it. However, knowing the FCRA Dept’s ways of working, no one can say for certainty, if they could raise objections subsequently. In any case, since there is no provision under FCRA for filing Revised FC4, officially they cannot file a revised return. I would suggest that they may consider writing to the Dept on FCRA support email, enclosing revised return and stating the obvious that they are not able to file the revised return, and hope for the best.