Transfer of fund outside India by NGOs

Posted on January 20, 2012 by SRRF

Hi,

Is there any Law enforced in India which prohibits  NGO based in India to make grant/contribution for a project to a foreign  individual or to an organization  of a foreign country?

Looking forward to your response.

Shekar

IFA

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One Response to Transfer of fund outside India by NGOs

  1. Deepak Bansal says:
    March 20, 2012 at 12:57 pm

    We should see provisions of two acts namely IT Act 1961 and FCRA Act 2010 to find the answer to this query.

    Sec 11(1) (c) prohibits any application of income of trust outside India unless prescribed conditions are met, namely specific approval from CBDT should be obtained and donations/ transfer of moneys should take place to those countries which tends to promote international welfare.

    Regarding FCRA provisions: If the funds are being transferred with a purpose that application of this fund will benefit project in India, then most likely it will be a consultancy contract. FCRA Act 2010 does not envisage a situation where one can transfer finds to a foreign NGO for grants, etc, hence any transfer to a foreign NGO would need to be looked at from case to case, since before even FCRA issues comes into picture, one would need to consider the Income Tax angle.

    Regards,
    Deepak Bansal

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