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Final Part – How to get Income Tax Refund of NGO Quickly

Before moving into final part of blog on the series of “How to get Income Tax Refund of NGO quickly ?” , lets revise earlier procedures. First of all you need to check refund status and find out for which year/years refunds are pending. (Click here to know procedure for refund status). Then, check whether your refund/return has been processed properly or not. This is very important step. (Click here to check intimation u/s. 143(1)) 

Final procedure to get Income Tax Refund of NGO quickly

So, once you checked that refund you claimed in the return and processed is same, you can submit request for re-issue of Refund. Follow following steps :-

Step 1 : Login to Income Tax Websitehttps://www.incometaxindiaefiling.gov.in/home


Step 2 : Go to “My Account” -> “Service Request”


Step 3 : Click on “New Reuest” -> “Refund Reissue” and click “Submit” button.


Step 4 : Select the year for which you need to re-issue refund.

Step 5 : Fill the Correct Bank details

Hopefully, you will get the refund amount in the bank account you have given within 15 to 20 days. Hope this will be helpful to your organization. If you have any query or any other problem, write in the comment section of this blog or email to us.

How to get Income Tax Refund of NGO? – Part2

We have already seen in last blog that, how to check status of refund of your NGO for years.

How to get Income Tax Refund of NGO quickly?

Once, you list out which years Income Tax Refund of NGO not received, we need to find out the reasons for the holding of such refunds. There are reasons behind holding you return, some of them mentioned below –

  1. Mismatch of Bank Details given in return
  2. Case transferred to AO for scrutiny
  3. Refund is adjusted against demand of Assessment Year or Years
  4. Errors in Income Tax Return
  5. Mismatch of TDS claimed in Return with 26AS

Intimation U/s 143(1)

To follow up for refund, one of the important document is “Intimation u/s. 143(1)”. After processing Income Tax Return of your NGO, department generally informed you about this in the form called “Intimation u/s. 143(1)” . This document is emailed to email addressed you mentioned in the ITR. This is important to find out how your Return is processed and what errors are generated and why refund is pending. It looks like this.

There is basically comparison between what you have filled in your ITR and how it is processed at IT department. There has to be same figures for both the columns. What is important is point no 49, which states REFUND. See below :-

If this two figures are same (Department column may be more because of Interest), It means your Income Tax Return is processed properly.  If you have not received to your address, you can even request to send it again.

Request for re-issue of 143(1) Intimation

This is how you can request for re-issue of intimation of particular years.

Step – 1 : Go to https://www.incometaxindiaefiling.gov.in/home

Step -2 : Login with your password

Step -3 : In “My Account” click on “Service Request”

Step -4 : Now select “Request Type” – New Request and “Request Category” – Intimation 143(1)

Step -5 : Click Submit, then enter as below:

Return Type – Income Tax

Assessment Year – As per your excel

Category – Intimation U/s. 143(1)

Sub Category – Resend by Email

Step -6 : Click Submit. Within 2 to 10 days, you will receive an email form Income tax department with attached 143(1) Intimation.

 

So, once you compare all the years Income Tax Refund, which are pending, with 143(1) intimation, you need to now request for re-issue of Refund.

Coming Soon – Part 3 How to request for re-issue of Refund of NGO

How to get Income Tax Refund of NGO quickly?

Income Tax Refund of NGO

Mostly, TDS is deducted by Banks on the Interest income of NGO. As, NGOs / Trusts are having 12A certificate of Income Tax Exemption, there is no tax on income of NGO and thus all TDS amount is to be refunded by Income Tax Department. However, due to technical and other problems, Income Tax Refund of NGOs are pending with the IT Department for many years. Lets have a look on how to get Income Tax Refund of NGO quickly. But before that you need to first make sure Income Tax Return of your NGO is properly filled in ITR7 form.

All you need to know about Income Tax Return of NGO – ITR7

Also need to check which years refunds are pending and why. So lets find out how to check status of refund of ngo.

There are two ways to check Income Tax Refund of NGO

1) from NSDL Website.

Go to this website : https://tin.tin.nsdl.com/oltas/refundstatuslogin.html , enter your PAN, Assessment Year and Captcha.

 

It will show you the status of your Refund. If Refund is already issued,it will show date when refund is credited to your Bank Account. If your refund was send by Department, but due some errors like wrong Bank Account Number or any such technical issues, it was returned and not credited to your Bank Accounts. In such a case you have to apply for re-issue of Refund. Third possibility is that your case is transferred to AO for scrutiny and thus refund is on hold.

2) With your login ID and Password

If you have login ID and Password of Income Tax Website, you can login and check status from there. If you do not have password, ask to your CA or consultant who has filled your online return.

Importnat Tip

You must keep password of your Income Tax Website with you. Never allow to give email or phone of your CA in your NGO return.

 

Go to this website :- https://www.incometaxindiaefiling.gov.in/home and login with UserID (your NGO PAN) and password.

Go to “My Account” button and click on “Refund/Demand Status”. Under this tab it will display Assessment Year, Status, Reason (for Refund Failure if any) and mode of payment.

Conclusion

Do not only rely on your CA or consultant for Income Tax Refund of NGO. Check your status of refund as mentioned above. In my next blog I will show you steps on how to get refund quickly, after checking refunds of which years are pending.

How to get Income Tax Refund of NGO quickly? – Part 2

How to configure Tally ERP9 for NGOs – Cost Category

Series – How to Configure Tally ERP9 for NGOs

Topic – Using Cost Category for Three Di-mention Reports

Do you need to provide different reports to different funding agencies in different format ? Are you using EXCEL as main tool to get report ? Do you need to take figures from Tally and present it in different formats ??? If, so than read this blog to configure Tally ERP9 in such a way to get almost all the reports from it.

What is the Problem ?

NGO need to report to different agencies / people in different formats. Like funding agencies wants  to know “Expenditure as per budget Head”, Trustees or Program Head wants to know about Project wise / Area wise / Activity wise expenditures and Auditor wants to know expenditure in standard format like nature wise expenses and so on…

What is the solution ?

To Create such an accounting system so that expenditures are entered once but get the reports from different Di-mentions. Tally ERP9 is capable of doing this by using Cost Category features. Lets take a look how we do it.

Step 1 – Configure General Settings

Gateway → F11 Features → Accounting Features → Cost/Profit Centers Management → Maintain Cost Center → Yes → More than once Cost Category → Yes

Step1_TallyERP9_CostCategory

Step 2 – Create Cost Category

Gateway → Account Info → Cost Categories → Create

I have Created two categories

1) Project wise Expenses – For entering expenses as per Budget Head of the Project

2) Nature wise Expenses – For entering expenses as per Nature like standard expenses i.e Telephone Exp etc..

Step2_TallyERP9_CostCategory

Step 3 – Create Cost Centers (Project Name)

Gateway → Account Info → Cost Centers → Create

I have Created three Projects – Project A, Project B and Project C expenses under Cost Category “Project wise expenditure”

Step3_TallyERP9_CostCategory

Step 4 – Create Ledger Account  (Budget Head)

Gateway → Account Info → Ledgers → Create

Create Ledger Account same as per Budget Head of the Funding Agencies under Project Name as group (Indirect Expenses) .  See below image – I have created Ledger “Communication – Field (PA) under “Project A Expenses” under “Indirect Expenses”

Step4_TallyERP9_CostCategory

Step 5 – Cost Center (Standard Expenses)

Gateway → Account Info → Cost Centers → Create

Now create Standard Expenditures under theses second type of Cost Category “Nature wise Expenditures”. I have Created Telephone Expenses and such other Standard expenses – see below image.

Step5_TallyERP9_CostCategory

Step 6 – Voucher Entry

Now whenever voucher entry is made you have to select two components i) Project wise and ii) Nature wise.- see below image.

Step6_TallyERP9_CostCategory

Step 7 – Reports

Gateway → Display → Statement of Accounts → Cost Centers → Category Summary

From this Report, you can get total expenses bifurcated in both way Nature wise Expenses and Project wise Expenses. Have a look.

Step7_TallyERP9_CostCategory

Step 7 – Reports (Continue…)

Gateway → Display → Statement of Accounts → Cost Centers → Cost Center Breakup

From this Report, you can get total expenses Project wise. Have a look.

Step7.1_TallyERP9_CostCategory

Conclusion – Use your creativity

By using cost category and your creativity, you can fulfill any requirements and have wonderful reports.

I have created Area wise expenditure to know exactly how much expenses in Rural Area and Urban Area or Filed office Expenses and Head office Expenses. Have a look….

Step7.2_TallyERP9_CostCategory

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

 

Year-end 5 points to consider for NGO

As 31st March approaching near, books of accounts has to be reviewed. In this post, we try to answer following questions. Why one has to review its books of accounts get closed? In NGO, who has to review accounts? And Which are main five points to look into while reviewing accounts before 31st March?

Reason for year-end review

Precaution is better than Cure

After year end, any changes to books of accounts may lead to look like postmortem. Accounting is an ongoing activity and whenever books of accounts get changed back dated, auditor can easily smell it.

Responsibility of year-end review

Is it whole and sole responsibility of Accountant? NO. I would rather suggest that, Project Coordinator has also to look into the specific areas, like all the activities, which has to be completed before 31st March, must reflect in the books of accounts. Thus its a joint work of Accountant-Project Coordinator and Top Management.

5 Points one should look

1. Negative Cash

Go to Cash Book maintain in the accounting software and get daily balance. Even a single day negative cash balance cause you trouble. There are many reasons for cash going negative on particular day and also number of ways to solve it. Though there are many ways to solve it, once books of accounts get close and audit is started, it is difficult to rectify.

2. Advance Grant

Check, grant received in advance for programs after 31st March is not taken as current year income, specially when project period is not in consistent with our financial year. Suppose Project Period is from 1/7/2013 to 30/06/2014 and full grant already received before 31/03/2014, then amount equals to estimated expenditure from 1/4/2014 to 30/06/2014 transfer to next year as advance grant. See below image showing extract of Income and Expenditure account :

advance grant

3. Completed Projects

Projects, which are completed during current year, has to look for any over expenditure or savings of funds even of smaller amounts. It is not possible that every total amount spent is exactly same as grant received for particular project. Sometime, there is over expenditure of smaller amount or savings from project. There may be contribution from communities or contribution of NGO. All these transactions are properly accounted for before 31st March.

4. Fixed Assets

In many of NGOs, it it never ending problem, that Fixed Assets mentioned in Audited Report is not matched with Physical Fixed Assets. Though every NGO maintains Fixed Assets registers, they do not have habit of review it before year-end. At the year-end Fixed Assets in physical form, Fixed Assets mentioned in Books of Accounts and Fixed Assets Register must be tallied.

5. Fund Balance

This is most important point. It is best practice that fund balance in books of accounts at any point of time is to be matched with cash and bank balance. For this before year-end, a receipt and payment accounts is to be prepared showing Opening Balance of Cash and Bank, receipts during the year, spent during the year and closing cash and bank balance.

There may me many other points according to situations and scope of your NGO. However above points are crucial to look into before financial year ends.

 

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