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Do you have any grievances related to FCRA ?

Do you have any grievances related to FCRA ? . The answer to this question is YES, then you can now meet Director (FCRA) in Foreigners Division of Ministry of Home Affairs. FCRA department has issued a circular recently stating monthly meeting by Director (FCRA) on 5th of every month for redress of organization’s grievances related to Registration / Prior Permission etc.. (Download Circular from here)

How to meet ?

Organization having any grievances related to FCRA have to take prior appointment.

How to take appointment ?

Email your grievances to ravinder.prasad56@nic.in

Details to be email

Following details to be mentioned in the email stating for appointment :

  1. Name and Address of the association
  2. Name of the person desirous to attend the meeting
  3. Application Number
  4. Issue of Discussion

When and where ?

Room No 104/1, 1st Floor, NDCC-II Building, Ministry of Home Affairs, Jai Sing Road, New Delhi – 110001 on 5th of every month (or on the following working day if 5th happens to be holiday) between 10 a.m. to 1 p.m. on appointment basis.

Amendments in FCRA Rule 2015 (draft)

After a circular regarding DSC of chief functionary, FCRA Department has issued a circular on 17th June 2015, (Download from here)asking for suggestion on amendments to Foreign Contribution Regulation Rules, 2011 by Foreign Contribution Regulation Rules (2015).

THIS IS A DRAFT AMENDMENTS and suggestions or comments asked from public and other stakeholders on or before 1st July, 2015.

We are in the process of analyzing and studying all the changes in the amendments and it impacts. Meanwhile let us see important changes which are suggested in the amendments of FC Rules :

Website will become mandatory

After this amendments, every NGOs with FC registration will have to build a website. No, it is not declared directly as mandatory. But changes made to Rule 13(1) stating that every registered organization has to publish audited Income Expenditure, Receipt Payments and Balance Sheet of Foreign contribution to its website before 31st December of every year. Such website has to be declared as official website and is to be informed to FCRA department.

Have to publish Foreign Receipt within 7 days

Yes, you have to publish to your official website, every foreign receipts within seven days of receipts. Refer rule 13(B) of such draft amendments.

Bank will have to report in 48 hours

Bank will have to report of FCRA department within 48 hours of any transactions in respect of receipt and utilization of any foreign contribution. Refer rule 16 (2) of such draft amendments.

Online Procedures

We have already write a blog stating how FCRA department is eager to implement all the online procedure. Here in this amendments it is clearly mention that now onwards all the forms will be filled online through DSC and also you can make payment through online payment gateway.

Change in Forms

All the form numbers will be changed e.g. Annual Return Form FC-6 now become FC-4. Not only form numbers, but details and information given in the forms will also changed. We will soon post a blog showing what changes will be made in Forms.

You can give Suggestions

FCRA department has asked for suggestions on the above mentioned amendments from public. You can give your suggestions by email to Mr. A.K. Dhyani, Under Secretary to the Government of India on ak.dhyani@nic.in.

Alternatively you can give your suggestion in the comment box below. We will compile all the suggestions and email to the authority.

Note – This amendments are draft and not final. This will be implemented only after FCRA Rule, 2015 published in the Official Gazzette.

LAST DATE FOR FILLING FC-6

Those NGO who is registered under FCRA act has to file annual return in Form FC-6 latest before 31/12/2014 for the year 2011-12.

Before submitting  FC-6 online return, one must check carefully, read our this blog on what should be check before filling FC-6 return

Annual Return Under FCRA Act

Last Date = 31st December 2014

Form = FC-6

Year = Financial Year 2013-14

Filling = ONLINE through Home Ministry Website

For More Details – See our calendar here

 

How to do renewal of FCRA registration of NGOs?

As we all aware about new provisions in Foreign Contribution Act, 2010, all NGOs have to renew its registration in every 5 years. Let us check in detail what is the Renewal Procedure and when and how to file renewal form.

When  FCRA registration expires ?

Existing organization having registration before 1st May 2011, their registration will be expire on 30/04/2016. Organization registered after 1st May 2011, 5 years from the date of the registration.

When  to apply for Renewal of FCRA registration ?

If you have multi-year on going projects – 12 months before expiry date as mentioned above. For existing organization, that cut off date is 30/04/2015.

If you do not have multi-year on going projects – 6 months before expiry date as mentioned above. For existing organization, that cut off date is 30/10/2015.

How to  to apply for Renewal of FCRA registration ?

Application has to be made in Form FC-5. You can download this form in word format from here. Currently FC-5 form is not available to file online like FC-6, so we presume that we have to file this form offline in hard copy.

Form FC5

Form FC5

How Much fees for Renewal of FCRA registration ?

Along with Form FC-5 , organization has to pay Rs. 500 by way of DD or banker’s cheque in the name of “Pay and Account Office, Ministry of Home Affairs” payable at New Delhi.

Time Limit for Renewal of FCRA registration

FCRA department has to renew the certificate, ordinarily within 90 days from the Form FC5 received. If renewal is not granted within time line, it shall communicate reasons for rejection to the organizations.

Consequences for Delay or Not apply for Renewal

In case an organization fails to apply with in cut off dates mentioned above or not apply at all, its registration of FCRA becomes invalid.

Video

Check out this video

 

Conclusion

It is advisable for organization to start preparing for Form FC5. Download Form FC5 in word format from here. In next blog, we will discuss in detail about what information is to be filled in Form FC5.

# Disclaimer
This video is prepared in the view to facilitate users to fill FC 5 form for FCRA renewal. Kindly refer FCR Act and Rules for accurate information. While we have made every attempt to ensure that the information contained in this site has been obtained from reliable sources, KCJMNGO is not responsible for any errors or omissions, or for the results obtained from the use of this information.

Expenditure of more than Rs. 20000 in Cash

FCRA advisory committee has issued a circular for all the NGOs having registration of FCRA  to spent expenditure of more than Rs. 20000 only by way of CHEQUE or DEMAND DRAFT. This means any CASH Expenditure for more than Rs. 20000 is not advisable as per this circular. The circular issued by FCRA department is attached here.

Let us get into the details.

Why such circular ?

FCRA department has mentioned in the circular that, they have observe many organizations has spend or withdraw huge cash from FCRA Bank and Utilization account.

Is there any provision in FCR Act 2010 ?

As such there is no specific section in the FCR Act, 2010 for limiting expenditure in cash. FCRA Department has given reference of  Sec 40a(3) of Income Tax Act for dis-allowance of expenditure of more than Rs. 20000. However in my opinion that section is applicable to only business income and not grants.

Consequences if spent expenditure for more than Rs. 20000

FCRA department has made it clear in circular that in case of payments expenditure  of more than Rs. 20000 by CASH, such associations are likely to require more intensive scrutiny by Government

What NGO has to do?

Try to make all the payments and expenditure of more than Rs. 20000 by crossed payee cheques or demand draft.

However, in practicality, sometimes NGO has to pay by CASH. In such circumstances there must be valid reason for that and NGO has to keep record for such explanation. So that in case of scrutiny, NGO can put its valid reasons before authorities. (It is author’s personal view)

For any further inquiry click here.

FCRA Department Circular

FCRA Cicrular_Rs20000

 

Have you Change Board Members Since FCRA Registration ???

CHANGE  BOARD MEMBERS MORE THAN 50% UNDER FCRA

After taking FCRA registration, NGO has to take prior permission before making any change Board Members in excess of 50%.  This condition is mentioned in the “Undertaking”  given by the applicant at the time of making Application for Registration or for Prior Permission.

Details are provided below –

Where such provision mentioned?

it is not mentioned in the Act or the Rules, it becomes binding on all the organisations by virtue of the ‘undertaking’ . Look at the below specimen of ‘Undertaking’. It is a part of application form of FCRA registration  or prior permission.

Why this kind of provision?

The primary purpose of this law is to prevent unscrupulous practices where the FC registered associations are taken over by changing the governance structure.

How to compute 50%?

Let us take one example. In an organization there were 7 Board Members at the time of Application made under FCRA. Later on one by one three Board Members were resign. Now fourth Board Member also wants to resign. So as per above undertaking, an organisation has to take prior approval from FCRA Department before change take place with fourth Board Member.

What if Change Board Members happen due to death?

There may be a change of more than 50% in the board as discussed above for reasons such as death or election by voting etc. which are not in the control of the organisations. In such cases, the organisation should inform the Central Government immediately after such change has occurred and get retrospective approval.

What is remedy  If prior approval of such 50% not taken in ignorance of law.

In such cases the organisation should inform the Central Government immediately after becoming aware of such requirement and request for condonation of the lapse. The Central Government may consider the matter if the reasons are justified.

Is it serious offence ? what are consequences ?

The Supreme Court in CIT v. Nagpur Hotel Owners’ Association [2001] 247 ITR 201, held that the additional condition in a Form can be held to be mandatory only if the purpose and the scheme of the pertaining Act is threatened to be defeated. In this case, the Supreme Court held in favour of the Government, but made it very clear that any condition specified in a Form should be within the provisions of the Act and Rules. In our opinion, any change in the Board of Directors in the normal course of activity, does not seem to be a violation of FCR Act or the Rules

Recommendation

However, it is recommended that all organisation should inform the FCRA department and take prior approal wherever it is possible. Further, those organisations who have not taken permission, even after such change has occured, should apply for permission and condonation.

source – FMSF


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