Current Budget proposals have made changes in FCRA Act.<\/p>\n
As per the existing definition of a foreign source, an Indian registered company which has more than 50% shareholding held by foreign sources is to be regarded as \u2018foreign source\u2019. However as per the new proposals, as long as the shareholding is within the FDI norms as declared under FEMA then such companies will not be treated as foreign source. This is in line with the proposal already floated by FCRA Dept and earlier discussed on SRRF Dialogue (visit link http:\/\/blog.srr-foundation.org\/?p=2786)<\/p>\n
It may be of interest that the change is being made effective from the beginning of FCRA 2010. Thus in case anyone has received funds from such companies, need not apply for condonation, considering changes in the Act. Further in future, now such funds will be treated as local and would not fall under FCRA.<\/p>\n
It may be of interest to note that considering BJP\/Congress have been indicted vide a HC Order on the issue of receipt of donation from Sterlite a subsidiary of Vedanta, discussed earlier on the above link. This amendment with retrospective effect could be to bailout the two political parties by excluding such companies from the very definition of foreign source. It may be noted that currently a Special Leave Petition is pending in the Supreme Court against the HC order. Current Budget proposals have made changes in FCRA Act. As per the existing definition of a foreign source, an Indian registered company which has more than 50% shareholding held by foreign sources is to be regarded as \u2018foreign source\u2019. However … Continue reading
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