Socio Research & Reform Foundation

Dear Sir,

I have been following up srrf dialogue through a friend of mine. I would be glad to be a member of this group.

I am associated with VACHAN, an NGO registered as a society and a trust and functioning in Nasik district, Maharashtra. It is a registered organization under FC(R)A.

We are implementing a community based health program as a partner with a support organization which is providing technical and financial support.

For this project. we were receiving funds from Indian source. However, during FY 2016-17, we have been intimated that some parts or whole line items of the budget would be sourced as FOREIGN CONTRIBUTION.

Now, this raise some doubts which require your expert opinion:

Query 1: Is it allowed under the amended Foreign Contribution Rules and Regulations, 2010, to receive Indian and Foreign contribution for the same project?

The donor has inserted a clause about distribution of the funds, this includes Foreign Contribution which this donor has received and is re-transferred

“The fund requisition format for 6 months duly signed by the head of the organization and accompanied by the latest financial report need to be sent. The first installment of funds will be released for 6 months, 2nd installment will be for 3 months and for the remaining 3 months the partners are expected to incur the expenditure and the donor will ” reimburse the expenses as per the year 3 budget)”

This would mean that we would have to provide advance from funds available under the FC account for the remaining three months.

Query 2: Can FC(R)A allow to use FC available for a specific project as advance to another one under FC account? It would be an advance booked in FY 2016-17 and would be reimbursed in FY 2017-18. This is important because balance amount under the FC account (Bank statement) would not match the balance as per Annual FC Returns FC 4.

Thanks and regards

Dhruv Mankad
5 Gokul Apartments
Usha Kiran Society
Trimbak Road
NASIK 422002

Dear Madam/Sir

We are registered under Sec25 of companies act 1956. Kindly let us know whether sec25 company (NGO’s) have to follow internal financial reporting system (IFRS)?

If yes, then can you share some format relating to IFRS reporting.

Thanks & Regards

—
Trupti Nahar

Most of us are aware that charitable institutions functioning under the remainder clause (i.e. advancement of objects of General Public Utility) are always worried that their income from sources which could be treated as from commerce, trade or business should not cross the lakshman rekha of 20% of total income (earlier this was a fixed monetary limit of Rs 25 lakh). If they crossed this limit, Income Tax officers generally would move application to cancel the registration under S. 12AA of such an entity.

CBDT has now issued instructions to all Income Tax Officers vide a circular[1] that in case a charitable institute crosses this limit, then while its income for that year would not be treated as charitable and would be subjected to taxation, however its registration for that year will not be cancelled. Therefore in case, the next year, the income remains within the permissible limit, the entity will be treated as charitable for that year.

The circular also states that above is important so that such one-time taxation of a charitable institution should not result in unintended taxation on accreted income under S. 115TD[2], which could result in additional tax liabilities.

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Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
e-mail: socio-research@sma.net.in; website: http://www.srr-foundation.org

[1] Circular No. 21/2016 dt 27 May 2016

[2] S. 115TD not only imposes tax liability on accreted income of any charitable agency whose registration is cancelled, etc. but would also need to pay additional penalty if the tax is not paid within 14 days.

As most of the stakeholders associated with Voluntary Sector had been lamenting regarding shrinking of FCRA funds for the Sector. Now this is confirmed. In a press report based on a RTI application filed by NewsLaundry.com, a media portal, it is now confirmed that FCRA funds for FY 2014-15 were only Rs 8756 crores compared to Rs 13,115 crores during FY 2013-14. A reduction of over 33% of funding.

State-wise most states funding has come down, but Delhi, having a large number NGOs’ Head Offices’ used to be the highest FCRA fund receiver, however it has been drastically come down by more than 50%. Tamilnadu and Andhra are the other two states where FCRA funds have declined significantly.

Considering that many religious organisations are likely to continue to receive funds, even if reduced marginally, the impact is likely to be most pronounced on the organizations working in the social development sector and worse off are likely to be the ones predominantly in the advocacy and human rights arena. Several social development organizations fear this trend is likely to continue for the time being.

Source: http://www.newslaundry.com/2016/05/20/under-modi-government-foreign-funding-of-ngos-has-come-down/

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Socio Research & Reform Foundation (NGO)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
e-mail: socio-research@sma.net.in; website: http://www.srr-foundation.org

Dear Dialogue Members,

Ours is a Corporate with over 51% of FDI. We also have a registered Foundation. We release project grants through these two sources to local NGOs. What kind of taxation is involved when we release money to NGOs? TDS and Service Tax.

Thanks & Regards,

R S Sharat

Dear Sir/Madam

An FCRA registered organization has erroneously given its FCRA bank account number to a local donor. These funds were to be received as local donation. Effectively, Local  donations are credited to FCRA account (Amounting to Rs.2.88 lacs). What is the remedy. What steps should be taken to rectify the mistake.

Thanking you in anticipation.

—
Paresh S Sarda
1/1170 Sadashiv Peth
Tilak Road, Pune

Dear Dialogue members,

You will all be glad to know that the FCRA department has started issuing FCRA renewal order for 5 years from 1-11-2016. Some NGOs in our area have already received it. Others are awaiting. The order does not have a signature of the issuing authority and the e-mail from FCRA department mentions that it was digitally signed, but the banks are not accepting it without signature. The order copy has not been marked to the banks directly by the department and the NGOs have been asked to hand over a copy to the bank/s, where they have FCRA account/s. They have also not yet published a list of NGOs who have been issued with he renewal order.

I have written to the Director, FCRA about all these lacunae. Those NGOs who have not yet received the order may constantly watch the official e-mail inbox of the their organisation.

S.S.Shiva
FCRA consultant
Coimbatore, Tamil Nadu

Dear Sir

Good evening!!!

Please tell me about how fill up15 G form of Pf withdraw.

Thanks
Vijkendra Kumar