FCRA 2010 and LLA 2013

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1 FCRA 2010 and LLA 2013 SIRC of ICAI 27 th August 2016 CA M. Kandasami, FCA, DISA Kandasami & Associates Chennai, India

2 Foreign Contribution (Regulation) Act 2010 Session 2.1 CA M. Kandasami, FCA, DISA Kandasami & Associates Chennai, India

3 Regulatory Framework Incorporation Laws Other laws and Regulations Social Security Laws

4 Other Laws and Regulations Income Tax Act, 1961 Foreign Contribution (Reg) Act, 2010 Service Tax / LLA 2013

5 A Plan of this Presentation 1 FCRA Registration Renewal Status 2 Updation of Bank Accounts 3 Qtly/Yly Remittance Information 4 Annual Report in new Form FC 4

6 Renewal Status of FCRA Registration FC 5 Manual was made FC 3 online and fee through payment gateway Time limit extended up to 15 th March 2016 and again extended up to 30 th June 2016 Validity of FCRA Registration extended up to 31 st October 2016

7 Renewal Status of FCRA Registration Most of them have received their Renewal Those yet to receive, check online status Those who received, advised to check the correctness of contents (e.g. Nature of Assn.) Though earlier Registration valid up to 31 st Oct 2016, banks require renewal now

8 Renewal Status of FCRA Registration NPO should intimate the bank about the renewal of registration Some NPOs are getting show cause notice for not having applied for renewal Under Rule 12(8) of FCRR 2011, within 4 months after expirty, renewal can be applied

9 Bank Accounts updation No change in the FCRA designated Bank A/C Bank A/c No. in the bank statement and the FCRA Registration / Renewal certificate is matching The above number is also correctly reflected in the FCRA website when you open the FC 4 with username and password. However, MHA requires mandatory updation of the bank information.

10 Bank Accounts updation There is no change in the FCRA designated Bank Account not correctly reflected in the FCRA website Bank A/c No. in the bank statement and the FCRA Registration / Renewal certificate is matching But the above number is not correctly reflected in the FCRA website when you open the FC 4 with username and password. Also, there is no information about the designated bank account at all in the website. The correction or information has to be updated in the website through FC 6.

11 Bank Accounts updation There is a difference between Bank A/c No. as per the bank statement and the FCRA Registration / Renewal certificate Bank has given a new computerized number for existing number. A letter from the bank including the fact that new computerized number is allotted. Bank A/c No. in FCRA Renewal matches with Cheque book, but not as per bank statement

12 Utilisation Bank Account Updation In case of utilisation bank account or accounts other than FCRA designated bank accounts: Just like designated bank A/c, utilisation bank accounts also have to be updted

13 Display of Annual & Quarterly info Compulsory Annual Uploading of financial information without any financial limit Previously, the financial limit was Rs. 1 Crore Annual Financial Information -R&P, I&E and B&S in the website on or before 31 st December Compulsory Quarterly Uploading of Grant information without any financial limit on or before 15 days after the end of the quarter

14 Filing of Annual Return FC-4- Issues Details of Foreign contribution received as transfer from Local source as second recipient is not allowed to be captured as on line message states Cumulative amount shall not be greater than total FC received during the block year. Donor wise detail received in excess of Rs 20,000 alone needs to be disclosed. This means that FC- 4 receipt will not match with FC audited financial statements.

15 Filing of Annual Return FC-4- Issues address, website address and purpose for which it is received shall be provided. There are only five purposes as against 56 purposes in earlier FC-6. The five purposes are Social, Educational, Economic, cultural and Religious. The purpose wise opening balance, utilisation and Closing balance is not required.

16 Filing of Annual Return FC-4- Issues Utilisation of Foreign Contribution Utilisation for aims and objectives of the organization. Administrative expenses. Total invested in Fixed Deposits. Total purchase of Fixed Assets.

17 Filing of Annual Return FC-4- Issues Utilisation of Foreign Contribution The amount invested in Fixed Deposits is not getting added in the Total utilisation in the year. Amount invested in Fixed Deposits cannot be construed as utilisation. It could have been a separate line item not forming part of utilisation.

18 Filing of Annual Return FC-4- Issues Balance of Unutilised Foreign contribution Balance of unutilised Foreign contribution in cash/bank at the end of the year. To reflect Cash on hand, cash at Bank and Fixed deposits in bank. Do not include any programme advances, Rental advance, EB and telephone deposits

19 Filing of Annual Return FC-4 Annual Return Form No. FC 6 changed to FC 4 Six attachments(fs, Bank Statement, CA certificate, Declaration by CF, seal & Signature Last date for uploading Form No. FC 4 for FY st December The Form for intimation of foreign Securities and Articles is FC 1 and earlier forms FC 7 and FC 8 The Associations filing nil return need not upload any financial statements.

20 Filing of Annual Return FC-4- Issues Balance of Unutilised Foreign contribution Certificate of Chief Functionary (2(iv) and CA certificate (point no. (iv), Should CB include Cash. Bank and FDs or Adances and deposits? Suggestion: Give only cash, bank and FD with a foot note that advances are not included.

21 Filing of Annual Return FC-4- Issues Information regarding Foreigners working in NPO Total number of Foreigners working as salaried or Honorary capacity. In the case of Foreigners, it is advisable to that the formalities of approvals as per Foreigners Act are complied with.

22 Filing of Annual Return FC-4- Issues Validation of designated / utilisation bank accounts: If the receipt and utilisation is in the designated bank account the designated bank account shall also be filled up in the utilisation bank account as well. Check whether all the utilisation bank accounts have been intimated to the MHA before filling up the bank accounts.

23 Filing of Annual Return FC-4- Issues Caution while uploading bank details All FC bank account statements (both designated and utilisation) needs to be uploaded along with the FC-4 return. The bank account details shall contain branch address with Pin code, IFSC code and Account number.

24 Prior approvals simplified to intimations Change of name of the Association For change in designated bank account For opening utilisation accounts (already) For more than 50% change in board members For change in aims and objectives For change in address within the State For the above, Form No. FC 6 to be done online

25 Other Intimations Gift from Relative - FC-1 within 30 days Emergency Hospitalisation Plain paper within 60 days Receipt by Election Candidate - FC-1 within 45 days from declaration Opening Sub Bank Account FC 6 within 15 days

CHARTER FOR ASSOCIATIONS APPLYING FOR GRANT OF PRIOR PERMISSION/REGISTRATION UNDER THE FOREIGN CONTRIBUTION (REGULATION) ACT, 2010.

CHARTER FOR ASSOCIATIONS APPLYING FOR GRANT OF PRIOR PERMISSION/REGISTRATION UNDER THE FOREIGN CONTRIBUTION (REGULATION) ACT, 2010. Any Association wishing to receive foreign contribution (FC) must have