Dear Members,
Require your opinion:
If a FCRA certificate holding Society-cum-Trust has obtained permission from the Charity Commissioner to sell its immovable property which was purchased 20 years back from its Foreign funds. Now, the authorized buyer which is a LLP company or a Trust wants to electronically transfer the amount agreed upon.
QUESTIONS:
- Which FC account should the buyer be advised to transfer to: the main account at SBI, NDMB or its FC utilization account (from which the immovable property was purchased)?
Kindly guide us.
Dhruv Mankad
This permission would not be sufficient. I think MHA approval is necessary for disposal or transfer of capital asset generated or procured our of FCRA project funds. After that the transfer proceeds can be deposited in FCRA designated Utilisation Account. The FCRA main account has clearly specified sources of credit.
There is no exact clarity where funds generated from sale of asset should be transferred. Till 2011, since there was no Utilisation account, we had to transfer all funds to Designated account only. After 2020, when FCRA rules now require that designated account would be with SBI Parliament Street Branch only, we are left little choice, but requesting SBI to allow the funds to be deposited in designated account. However if SBI refuses (it sometimes insists that only funds from outside India can be rec’d in this account), my suugestion would be to deposit in the ‘Another FCRA A/c’ . Utilisation A/cs should be used, only for transfer of funds from ‘FCRA designated account’ and ‘Another FCRA Account’ and for utilisation. Deposit of funds from sale of property into Utilisation A/c should be avoided.
AS per the FCRA rule, the FCRA immovable property sold amount can be deposited into FC utilization account.
you may received the funds against sale of property under FC Utilization bank account.
Thanks. Makes sense.