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FCRA – GAME OVER ?

The Foreign Contribution (Regulation) Amendment Bill, 2020, introduced in Lok Sabha by Home Minister Amit Shah today at 3 pm, says the need to strengthen the Act has arisen due to several organisation “misutilising or misappropriating” the funds leading to the government cancelling 19,000 such registrations in the past few years.

1) Mandatory to open FC Bank in SBI-Delhi Branch

Amendment of section 17 of the ACT has sought to provide that every person who has been granted certificate or prior permission under section 12 shall receive foreign contribution only in an account designated as ‘‘FCRA Account’’ which shall be opened by him in such branch of the State Bank of India at New Delhi, as the Central Government may, by notification, specify. It has, however, allowed the organisation to transfer these funds to another account for utilisation.

2) Slashing Administrative Expenses further

It is proposed to slash administrative expenses further from 50% to 20%. This will be the harsh step for NGOs. Already the definition of Administrative Expenses is very vague and no clarity over which expenses should be include or not.

3) AADHAR CARD for Board / Office Bearer

It is proposed now that AADHAR is mandatory for all the office bearer and board members. Earlier FCRA has already introduced to submit an affidavit by each board members. That affidavits is almost like a had-cuffs. One more step by making AADHAR mandatory to demotivate person to be on the board of the NGO.

4) No more Transfer of FC Funds to other NGO

Now, no more transfer of FC funds to any other organisation. Means, no Networking no sub-grant. However, more clarity is required on this.

5) And some more restrictions

Also, a “Summary Inquiry” is proposed by government, wherein FCRA department can freeze your funds even in the middle of the Project.

Full Blog

Read Full blog here

FCRA-Amendment-2020Download

The Conclusion

The important question here is – Is this beginning of the end?

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Cancellation of FCRA registration – New List

FCRA department has recently issued the new list of organizations whose registraion have been cancelled due to non filling of FCRA return for FY 2017-18

Cancellation of Registration

On 28.11.2019, FCRA department has issued a notice dated 19th October stating list of the organizations who have not filled FCRA return in Form – FC4 for FY 2017-18. There are 1808 organization all over India. Click here to view the full list.

It is now clear that, department do not accept paper return and thus it is mandatory since many years to file FCRA return in online mode.

Check out our video on how to file FC-4 return online.

Opportunities for being heard have been given

As mentioned in the notice, department had already given the oppertunity of filling onine FC return to the organizations who have not filled despite of due date was over. Thereafter, a SMS or emails were sent to remaining organizations as final oppertunity and after thatn those who had not comply, the registratinons were cancelled.

Now the way out

Once registraton stands cancel, organization can not apply for the fresh application of FCRA for 3 years. However, in the notice, it was mentioned that FC-4 return can be filled with the penaly after due date. Thus, in my opinion, organisations whose registraions are cancelled should request the department allow them to file FC return along with penalty and therby request to restore their registraion.

For other organisatoins

Now, the violation / negligence of compliance has been taken very seriously by FCRA department. Thus word of advie is to file FCRA return online well within deadline. So, for FY 2018-19, last date for filling FCRA return online is 31.12.2019.

Did I miss something?

Hope this will help you in your NGO, if you have any question,  you can ask here or chat with us. Also your comments are welcome on the above subjects.

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Rotation of Board Members in NGO

Do your organization have “Board Rotation Policy” ? Many funding agency and corporate asking this question before giving funds. It sounds irrelevant, but it is not. Every donor wants 100% utilization of single rupee, he donates to you. And every donor wants that an NGO should have highly effective governance. Today let us discuss this issue of rotation of board members or trustees in NGO from various view points, get your pregnancy pillow and get comfortable.

Is it Mandatory?

First and obvious question is about its legal implications. As, there are various acts in india under which an organization can be registered, there is no such specific rule regarding board member rotation and about timing. However, this issue is mostly addressed in the Trust Deed or Memorandum of NGO. If there is a clause in your Memorandum or Trust Deed regarding change or rotation of Board Members, you must follow it strictly.

Of-course, it is beneficial

It is not mandatory to rotate board members of NGO, but the benefits of such policy are very obvious that one should follow this practice. First and foremost, it shows good governance prevail in your NGOs, if you have rotation policy at regular interval. Second, it gives impression that, your NGO is having separate identity than only one or two individual founder members. It gives NGO more life span, when second generation leaders are trained this way.

Rotation or Change?

Depends upon the scenario and what mentioned in Trust Deed. However, only changing designation of same persons over years will definitely gives sense to Donor about just implementing policy on paper and not in true senses. Thus, it is better to have a proper policy for mixture of both rotation and change.

What is best “Board Rotation Policy”

The best policy is one which include robust period for the person to be in the board of the trust. Good boards should always have agreed terms of office so that there is a regular turnover of trustees and boards remain vibrant. Two terms of three years with a review at the end of the first term is fairly typical. NGOs should adopt this as best practice.

Let the world knows – Disclouser

Once you have a policy for board rotation in your NGO, it is best practice to put the same in your Annual Return under some Compliance or Good Practice page.

Hope this will help you in your NGO, if you have any question,  you can ask here or chat with us. Also your comments are welcome on the above subjects.

 

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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 Website – https://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. If you want to know more about this or other technologies, follow the Tech News from TechSmash.net. 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.

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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

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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

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