Socio Research & Reform Foundation

As many of you are aware that Income Tax Dept in March 2020 Budget had made it mandatory for all NGOs to renew their 12A, 80G and other certificates, however due to Covid many of these changes were not implemented. Now the Dept has brought out necessary Forms & clarity on how these are to be implemented.

RENEWALS / FRESH REGISTRATION

1. Income Tax Dept. has now come out with different FORMS, that it requires charitable entities to file for various registrations, certificates etc.
   • Entities already registered under S.10(23C), S.80G, S.12A, but need to renew their registration: Use Form 10A for application.
   • Entities not registered so far under S.10(23C), S.80G, S.12A, though have applied for registration using old Forms. If the application is pending as at 1-4-2021, will be treated as eligible for Provisional and will be issued provisional registration for 3 years, within one month of application/1-4-2021, whichever is later.
   • In future all new entities will need to file new Form (Form 10AB). Also entities with provisional certificates would need to apply six months before expiry of their certificate.
   • For getting relief under S.35  (Form 3CF)
2. Applications for renewal have to be filed within 3 months of 1-4-2021, i.e.  by 30^th June 2021. Approving authority has to issue the Order within next 3 months. In case approved, all certificates will be valid for 5 years, except Provisional certificate as explained above.

Certificate / Statement by NGO for S.80G Donations

3. All charitable entities now need to furnish a Statement of donation in the Form 10BD, electronically for donations under S.80G /S.35. This statement is to be prepared for all those donors who are eligible to claim this tax relief. The Statement would need to be filed before 31^st May following the year-end by the NGO.
4. NGO would need to issue certificate (Form 10BE) to donor for the financial year. This has to be issued by 31^st May 2021.

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Socio Research & Reform Foundation (NPO)                       
512 A, Deepshikha, 8 Rajendra Place,New Delhi – 110008

Hi, ‎

We have received query from SBI Delhi which is given as follows:‎

Annexure II need to be filled by all the signatories and ‎designated members (post holder)in personal capacity. (only ‎sign of the customer is required without the stamp). Kyc of the ‎same need to be obtained. (DESIGNATED MEMBERS TO BE ‎DECIDED AS PER THE LIST OF MEMBERS)‎

I’d like to know who are designated members?‎

Also our board resolution talks about a quorum of 6 ‎members . Are those 6 members considered members?‎

Looking Forward to your reply.‎

Regards,‎

Sandeep

Dear Sir/Madam

A charitable organisation running educational institution is not yet registered under 12A of ‎income tax act and under FCRA. It is registered under Society act in 2020 and started ‎constructing building and for this one of the member who is Non Resident Indian transferred ‎funds from outside India more than 2 cr in the account of society for construction of building ‎of the school. Society treated it as unsecured loan from the member which will be refunded ‎when the school will be in operation in due course.‎

Is there any implication of this transaction under FEMA or any other law? Please guide.‎

CA Arvinder Pal Singh

A NGO has FCRA,   running a Training Center (Build out of FC amount), any organisation wants to organise training at this place out of the FC project activities. Need guidance how to book this income in books of account at training center and how to book the expenditure at training organiser NGO. Please guide for further process. 

Thanks 

Kamlendra

Dear Sir/Mam. 

We have NGO. We have been working in rural area since the last 3 decades with foreign donation. I assume that I we will not be able to spend whole amount  deposited in BOI Branch till 31st March 2021. We have to open news FC account in SBI Delhi. I like to know what I have to do with money remaining unspent after 31st March 2021.Is it compulsory to spend all money from the old account within 31st March, 2021?

Please let me know soon.

Regards.

Samir Kr. Halder

Dear Sir/Mam,

Need your guidance regarding donation from Foreign National (Foreign Passport) doing business in India and having valid PAN card and Aadhar.
Does donation from this person through his/her SBI Account (India branch) be considered a Normal Donation or Foreign Donation (coming under FCRA Act) ? Can an NGO (Section 8 company) not having FCRA Certificate receive such donation ?

Please guide.

Regards,

Vikram Kanwar

Respected sir,

I’ve registered a trust through a lawyer on 6th feb 2021 in Mathura district of Uttar Pradesh but spelling of trust name on e-stamp is wrong. I’m president of the trust and would like to correct the spelling of the trust.

Kindly guide me and provide assistance.

Thanking you !

yours sincerely

Vagyakaar

We have the following query –

Can a charitable Trust having 80G and 12AA certificates, transfer funds into a vendor’s foreign account for services rendered outside India, but for a project in India? Would it flout any conditions of the grant of 12AA or 80G? The vendor could be an NRI with no account in India – or the vendor could be a foreign citizen.

Thank you

Ruby Kamdin
Director
One Billion Literates Foundation

There is some confusion regarding consequences of non-renewal before expiry of FCRA Registration Certificate.  Many consider that in such a scenario, concerned entity cannot receive or utilize funds. This is based on reading of Rule 12(5), which is reproduced below:

Rule 12(5): No person whose certificate of registration has ceased to exist shall either receive or utilize the foreign contribution until the certificate is renewed. [Note:There seems to be a typographical error and seems intention is to read ‘either’ as ‘neither’, otherwise the intention of the rule is not clear.] 

If one reads Rule 12(5) on its own, it states that once the certificate ceases, the entity can neither receive nor utilize the FC. To understand what does ‘cease’ mean, one needs to refer to Rule 12(6) alongwith accompanying Note 2.

Rule 12(6):  If no application for renewal of registration is received or the application is not accompanied by requisite fee before the expiry of the validity of the certificate of registration, the validity of the certificate of registration shall be deemed to have ceased from the date of completion of the period of five years from the date of the grant of certificate of registration.

Note 2: If no application is received or is not accompanied by renewal fee, the validity of the certificate of registration issued on the 1st January 2012 shall be deemed to have ceased after the 31st December, 2016 and the applicant shall neither receive nor utilize the foreign contribution until the certificate of registration is renewed.

From Rule 12(6) and accompanying Note 2, the term ‘ceased’ of the FCRA registration is applicable only

1. if the Dept has not received renewal application, or
2. the application is not accompanied by requisite fee,

before the expiry of the FCRA certificate.

Thus if Rule 12(5) & 12(6) are read together it can be said that an entity can continue to receive and utilize FC funds even after expiry date, provided the above two conditions have been complied with. Thus it is most important to ensure that renewal application alongwith the right amount of fee, is submitted before expiry of the renewal certificate.

While this could mean that an entity can neither utilize nor receive funds in FCRA accounts, however considering FCRA Dept imposed penalties on entities which received funds after expiry of their FCRA certificate in 2016, one should tread cautiously.

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Socio Research & Reform Foundation (NPO)                       
512 A, Deepshikha, 8 Rajendra Place,New Delhi – 110008