19 points of Difference between Trust, Society and Section 8 company
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Reporting Foreign Contributions:-
Under the Foreign Contribution (Regulation) Act, (FCRA), all not-for-profit organizations in India (e.g., public charitable trusts, societies and section 8 companies) wishing to accept foreign contributions must a) register with the Central Government; and b) agree to accept contributions through designated banks. Furthermore, not-for-profit entities must report to the Central Government regarding foreign contributions received, within 30 days of their receipt, and must file annual reports with the Home Ministry. The entity must report the amount of the foreign contribution, its source, the manner in which it was received, the purpose for which it was intended, and the manner in which it was used. Foreign contributions include currency, securities, and articles, except personal gifts under Rs. 1,000 (approximately $20). Funds collected by an Indian citizen in a foreign country on behalf of a not-for-profit entity registered in India are considered foreign contributions. Moreover, funds received in India, in Indian currency, if from a foreign source, are considered foreign contributions.
According to FCRA guidelines if 50% or more of the “office bearers” (not members of the board of management) of a trust/society or section 8 Company change, the organization must apply to the Home Ministry for approving the change. This approval could take as long as three to four months.
However, in the interim period, the FC(R)A registration granted to the organization would stand “suspended”.
FC(R)A guidelines require that an organization allowed to receive funds from a foreign source, may provide funds from its FC(R)A account to another organization, only if the other organization also has clearance from the Home Ministry to receive funds from a foreign source.
If the foreign donor agency specifies in writing that the whole or part of the grant may be taken to “corpus”, the recipient organization may do so. Such corpus fund may be invested in an approved security.
The “interest” or “dividend” generated should be accounted for as amount received by way of interest on deposit drawn out of funds received from a foreign source.
In other words, even the interest/dividend received in India in Indian rupees must be disclosed in the Return Form FC-3.
Under the Foreign Contribution (Regulation) Act, (FCRA), all not-for-profit organizations in India (e.g., public charitable trusts, societies and section 8 companies) wishing to accept foreign contributions must a) register with the Central Government; and b) agree to accept contributions through designated banks. Furthermore, not-for-profit entities must report to the Central Government regarding foreign contributions received, within 30 days of their receipt, and must file annual reports with the Home Ministry. The entity must report the amount of the foreign contribution, its source, the manner in which it was received, the purpose for which it was intended, and the manner in which it was used. Foreign contributions include currency, securities, and articles, except personal gifts under Rs. 1,000 (approximately $20). Funds collected by an Indian citizen in a foreign country on behalf of a not-for-profit entity registered in India are considered foreign contributions. Moreover, funds received in India, in Indian currency, if from a foreign source, are considered foreign contributions.
According to FCRA guidelines if 50% or more of the “office bearers” (not members of the board of management) of a trust/society or section 8 Company change, the organization must apply to the Home Ministry for approving the change. This approval could take as long as three to four months.
However, in the interim period, the FC(R)A registration granted to the organization would stand “suspended”.
FC(R)A guidelines require that an organization allowed to receive funds from a foreign source, may provide funds from its FC(R)A account to another organization, only if the other organization also has clearance from the Home Ministry to receive funds from a foreign source.
If the foreign donor agency specifies in writing that the whole or part of the grant may be taken to “corpus”, the recipient organization may do so. Such corpus fund may be invested in an approved security.
The “interest” or “dividend” generated should be accounted for as amount received by way of interest on deposit drawn out of funds received from a foreign source.
In other words, even the interest/dividend received in India in Indian rupees must be disclosed in the Return Form FC-3.
Disclaimer:
Readers are advised to refer relevant provision of law before applying or accepting any of the point mentioned above. Author accepts no responsibility whatsoever and will not be liable for any losses, claims or damages which may arise because of the contents of this write up.
I am hopeful that this write up would be of some help w.r.t. your professional working and endeavors
Thanks&Regards
CS Divyanshu Sahni
Mob: 9871027426
Mail id: divyanshu.sahni@yahoo.in
19 points of Difference between Trust, Society and Section 8 company
Reviewed by CS DIVYANSHU SAHNI
on
00:44
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good , i am planning intiation trust / society , which is better ? please reply sir anandtalli024@gmail.com
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