Socio Research & Reform Foundation

All NGOs need to reapply for 12A / S.80 G certificates

EXISTING NGOS

Budget 2020 has brought bad news to all non-profit organizations, everyone would need to reapply for renewal of 12AA & 80G and S.10(23C) certificates. Let’s deal with each one of these registrations separately. In today’s post, position of existing NGOs is being covered, who already hold these registrations.

Certificate under 12AA

As all of us know, all non-profits who want their income exempt from Income Tax have to hold certificate under S. 12AA. This makes their income exempt from taxation, as long as they comply with S.11 conditions of Income Tax Act. Under the proposed budget provision, Section 12AA has been withdrawn and new Section 12AB has been inserted. As per this section all those holding certificates issued under 12AA or 12A would need to reapply for the certificates within 3 months of the section 12AB becoming effective. Thus all existing NGOs would need to apply for renewal of exemption certificate under S.12AB within 3 months of the notification date. 

The new certificate will be applicable from the Assessment Year from which the registration was issued originally. There is confusion based on drafting of the Budget provision, since it says that the certificate would be applicable for 5 years, however if an NGO’s original S.12AA certificate was effective say in 2010, then would it expire in 2015. We are sure that is not the intention and hopefully necessary correction would be incorporated in the certificate, ensuring 5 year’s from the date of current application.

The good thing is that the Income Tax Dept would need to decide about certificate within 3 months from the date applied.

Certificate under S.80G

Similarly a new application would need to be made for obtaining a new certificate under S.80G within 3 months of the notification notifying this clause becoming effective. Thus an application would need to be moved for obtaining a new certificate under this section.

Certificate under S.10(23C)

All entities holding registration under S.10(23C) would similarly need to reapply for a certificate under the new amended S.10(23C). Provisions are similar lines as described above for S.12AA certificate, that is, to be applied within 3 months from the date of notification, and decision to be given within 3 months of receipt of application. In case an NGO presently has both the S.10(23C) as well as S.12AA certificate, then S.12AA certificate would become inoperative.

Provisions for New NGOs would be covered in next post.

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

Sir,

Can a non FCRA registered Trust take financial help from FCRA registered organisation for buying USG machine and other equipements for its small hospital having licence from the government?’

Please do reply soon.

With best regards.
Samir Kr. Halder,

Dear Members

An Indian entity transferred money to our FCRA account in March 2019. We informed the bank and the funds were returned immediately.

While filing quarterly returns the amount has been mistakenly shown as income. Is there a process to correct this?

Thanks

Dr.Prahalathan KK,
Co-founder, Bhumi

Dear Sir,

We have a registration under the FCRA act. We want to close an existing utilisation bank account. Is it necessary to take any prior permission from FCRA Department of the MHA? Or is it necessary to intimate the FCRA department about he closure of the utilisation bank account?

Regards,

Vidya Sagar Devabhaktuni
President
SKG Sangha

Dear Sir,

Please share some inputs on getting approval from CBDT to work outside
India for Charitable Purpose to promote International Welfare. What
are the criteria and the procedure.

Regards

Pragya Thakur

Dear Members

We have following query:-

Can a person be a executive committee member in more than one FCRA registered organization ? In one association , he is chief functionary and in second confederation , vice president. Now confederation while applying for changing its name has asked all office bearers to file undertaking on affidavit.

Will there be any issues if the same persons file the affidavit from two or more FCRA registered associations?

Regards

Sudeep Goyal

Dear Sir,

We have a designated bank account with Vijaya Bank for FCRA purpose. We also have two utilisation bank accounts with other branches of Vijaya Bank. Now the Vijaya Bank has been merged into Bank of Baroda. Since the name of the bank has ben changed from Vijaya Bank to Bank of Baroda, is it necessary to get the name of the bank changed with FCRA Department?

Kindly advise.

Regards,
Vidya Sagar Devabhaktuni
President, SKG Sangha

Dear Sir

Greetings!I have a querry regarding FCRA, would be grateful if you could clarify.

Q1: If any Non profit company (Registered under Section 8 of Companies Act 2013) in India is promoted by any international non profit organization / INGO who also hold the 100% equity shares of the said new entity / Not profit company. Can this new entity be granted the  FCRA / is it eligible to get FCRA registration, given all other criteria is fulfilled?

Q2: Is there any clause that stops any non profit from getting the FCRA if the name of the organization contains the “International” word as  part of its name? Also, if the name of the organization is similar to the International entity that has promoted the new Section 8 company?  

Looking forward for your guidance to enhance my knowledge about FCRA.
Thanks

Archana

Over 1000 organisation again removed from FCRA vide 18 Oct 2019 notice for failing to file 2017-18 return.

FCRA department has again cancelled the FCRA registration of aprox 1000 organizations vide a cancellation order dt. 18/10/2019. It has stated that these organisations have not filed their Annual Return for the 2017-18 even after due date extension of due date form 31.12.2018 to 31.03.2019.

In the e-notice/SMS sent following extract is being quoted:

“7. And whereas, the said association have failed to submit the ARs on the FCRA portal despite giving repeated e-notices/SMSs. Non submission of ARs by the Association is a violation under the Section 18(1) of FCRA, 2010 read with Rules 17(1) of FCRR, 2011 and they are therefore held liable for penal action for penal action as per the provisions under section 14 of the Act.

8.   now therefore in the exercise of the power conferred by section 14 of the act the central government has been cancelled the registration under the Act of the association w.e.f the date of issue of this order.”

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Socio Research & Reform Foundation (NGO)
‎512 A, Deepshikha, 8 Rajendra Place, New Delhi-110008.

Dear Sir,

I request you to let me know about the provisions mentioned in FCRA ACT 2010 ( 42 of 2010 ) subsection 4 of section 12.

With regards,

Samir Kr. Halder
Ashakiran Hospital Trust
Applicant for FCRA Registration