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FCRA/FEMA Registration

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FCRA/FEMA Registration

FCRA/FEMA Registration

Taxes can occasionally discourage many overseas nationals from requesting donations. To achieve this, you must provide them with some incentives and reassure them that all of their donations will get to you and won’t be primarily used for tax purposes. The FCRA registration enters the picture specifically for this purpose.

The FCRA’s main objective is to control the flow of foreign funds and gifts to different NGOs. If you choose to receive funding from overseas institutions and foreign citizens, this type of registration is required. The FCRA controls the fact that foreign donations cannot influence the domestic political environment.

Required documents

1. A copy of the PAN card of the NGO
2. Certified copy of the trust Deed/ MOU
3. Balanced sheet of the past 3 years. The balanced sheets should be audited.
4. Details pertaining to the current and past management of the trust.
5. Copy of resolutions that is passed by the governing body of the NGO.
6. Undertaking copy that is signed by the chief functionary of the NGO.
7. 80G and 12A certificates that are issues by the governmental authorities.

FAQ

The definition of a foreign contribution is found in Section 2(1)(h) of the FCRA, 2010. However, since this is a transaction of a commercial nature and involves earnings from foreign client(s), an association does not include these earnings when calculating its foreign contribution.

No. Foreign contribution can not be deposited or utilized from the bank account being used for domestic funds.

Yes. Any amount received from ‘foreign source’ in rupees or foreign currency is construed as ‘foreign contribution’ under law. Such transactions even in rupees term are considered foreign contribution

No, FCRA does not impose any particular method of accounting. But it does have certain specific reporting requirements which have to be complied diligently. A FCRA registered organization shall maintain a separate set of accounts and records exclusively for the foreign contribution received and utilized.

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