Hello
We are NGO registered under FCRA. Indian donor wants to donate to our NGO and wants us to send these funds to some NGO in Nepal for flood relief work. Do we have to comply with any regulations or we can directly transfer funds without any regulatory issues ? These funds are local Indian funds.
Surya Prakash Lunkar
Can NGO in India can transfer the funds received through CSR to another NGO having valid registration and 80G certificate?
If an NGO in India (Say NGO ‘A’) wishes to transfer funds to another NGO (NGO ‘B’), it has to ensure that the NGO B must be a S.12A/AB registered body. 80G is not important for NGO A, as it can treat this as application, only if NGO ‘B’ has S.12A/AB registration. However NGO ‘A’ can claim only 85% application of amount given to NGO ‘B’ after amendment in Finance Act 2023.
I think under FCRA funds have to be utilised in India only.
For spending local funds abroad FCRA not applicable only income tax Act applies
However the jurisdiction stated in bye laws needs to be adhered, when application is done out of india through indigenous fund the required approval from govt of India is needed.
There is no section under FCRA which states that funds should be utilised in India. S.11 where registration is required, only states ‘person having a definite cultural, economic, educational, religious or social programme shall accept FC unless such persons obtain a certificate of registration from the Central Govt.’ It does not talk of where funds are to be used. It is another matter that FCRA practically does not allow funds to be transferred outside India. Further recent changes in Form FC4, require if any funds have been spent outside the country. Considering Forms do not have any legal backing, as these are not passed by Parliament, but only issued by the Dept. However in view of various restrictions by the Dept, effectively FC funds cannot be utilised outside India. It is the Income Tax which prohibits funds to be utilised outside India, unless permission is obtained from CBDT.
Restriction on Indian NGOs for spending funds outside India is under Income Tax Act. Under IT 1961, it was covered by S.11(1), which stated that the income must be applied to such objects of NGO ‘in India’. In case the income is applied outside India, it will be treated as application only if the CBDT has allowed it to be spent outside India, either by general or special order. (S.332 of IT 2025).
Thus whether FCRA or non-FCRA restrictions apply, unless your NGO can obtain specific permission from CBDT for applying your income in Nepal.