It is mandatory to file FC6 Return to FCRA department of Home Ministry, External Affairs by every NGOs India having FC registration. Last date for filling FC6 Return is 31st December. It is compulsory to file e-Return on the fcra website www.fcraonline.nic.in.
Though the filling procedure of FC6 return is very simple, here I present a video tutorial on how to file fc6 return?
BEFORE year ends on 31st March, NGO has to look out some points regarding its books of accounts. An NGO has to prepare an Income & Expenditure Account, Balance Sheet and Receipts and Payments Account. In case of Income Expenditure Account and Receipts Payments Account, only current year figures are taken and thus no cleaning process required for it.
However in case of NGO Balance Sheet, figures and items are carried forwarded from year to year. In many of the accounts, only opening balances are carried down from years without having any transactions, and thus every year it is the duty of NGO Accountant to look at the Balance Sheet before 31st March, list out such types of dormant accounts and pass necessary journal entries to remove it, only after taking approval from higher designated person of the NGO.
Mostly Fund Accounts with very nominal balance, mostly in Unutilized Grants or Grants Receivables may be consider as dormant. If project was completed before 2 to 3 years back and if there is nominal balance either positive or negative, should be transfer to General fund.
Because of emphasis of Government funded projects to open a Separate Bank Account for Project, it may be seen that in an NGO, more than 5 to 10 Bank Accounts are opened. As such, there is no limitation on Maximum number of Bank Accounts, it should be restricted for administrative smoothness. Secondly, some charges are debited every year even we do not use Bank Accounts. To avoid all such, it is lookout of accountant to identified such unused bank accounts and start procedure of closing it.
Some of the Fixed Assets in NGO are on paper but you could not find it physically. I say them “Ghost” Fixed Assets. All these type of “Ghost” Fixed Assets should be removed even from paper by passing resolution and journal entries.
TDS of NGO is deducted from consultancy, or on Interest on Fixed assets and such other types of Income. This TDS is claimed as refund in Income Tax Return of NGO. However due to slow process of Income Tax Department in issue of refund. These “TDS Receivable” Accounts are carried forwarded from years. Sometimes, refund is already deposited in bank account but not properly accounted for. Go to this link of Refund Status Website to check how much refund is pending and only those related refund accounts should reflect in the NGO Balance Sheet
NGO Balance Sheet is a financial mirror of any organization and thus it must be clean periodically, else the picture reflects, will not look transparent.
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.
Trustees can not used Trust Assets for purpose other than official. Mostly Car, mobile phones, Air Conditions other furniture etc.. if used by Trustee or other related party, trust must have collect the hire charges for that.
Once upon a time, there was an NGO. One day they bought a refrigerator for Rs.5,445. They kept it at the Managing Trustee’s house. The income tax people wanted to know the reason for this. The NGO said: ‘Our office building was not ready. We wanted to offer cold water to our Swedish donors’.
Result? Tax people rejected the explanation and withdrew the NGO’s income tax exemption. The High Court also confirmed it.
Make sure the Trustees or key persons do not use the NGO’s assets. And if they are used, recover hire charges from them.
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.
