The timeline to file is 45 days from the date of any change in key members of the association. It is important to note that approval from the FCRA department is required after the intimation for the process to be considered complete.

Understanding the “In-kind donation deduction in 80G” under Income Tax

Do in-kind contributions qualify for deduction under Section 80G

No, in-kind contributions, such as computer equipment, medical equipment, or vehicles, are not eligible for deduction under Section 80G. The donation must be a certain sum of money.

Furthermore, we are pleased to share that we have covered an insightful article on FCRA Return (FC-4): Things to keep in mind this month.

An anonymous donation, as per Income Tax Act, is a voluntary contribution where the recipient doesn’t maintain records of the donor's name and address. These donations are only taxable if they exceed ₹1,00,000 or 5% of the total donations received—whichever amount is higher.

All NGOs registered or with prior permission under the FCRA must submit their Annual Return (Form FC-4) to the Ministry of Home Affairs (MHA) online by December 31st.

In cases where an NGO has not received any foreign contributions, it is still mandatory to file a NIL return.

Example: For the financial year 2023-24, the deadline to file Form FC-4 would be December 31, 2024.

Furthermore, we are pleased to share that we have covered an insightful article on Cracking the FCRA Code: 5 Essential Dos and Don’ts for NGOs this month. 

Yes. Audit Trail is mandated for accounting software used by section 8 Companies. As per Rule 11(g) of the The Companies (Audit and Auditors) Rules, 2014, auditors are also required to report on specific matters pertaining to their observation on the same.

Form ITR-7 must be filed according to the deadlines specified in Section 139 of the Income Tax Act, 1961. The due dates are as follows:

• For taxpayers not required to have their accounts audited: The due date is 31st July of the relevant Assessment Year.

• For taxpayers required to have their accounts audited (including companies): The due date is 31st October of the relevant Assessment Year.

Example: For FY 2023-24, the filing due date would be 31st July 2024 for those not subject to an audit and 31st October 2024 for those who are.

Form 10B/10BB shall be filed before the specified date referred to in section 44AB i.e. one month before the due date for filing of return u/s 139(1)

Accordingly, the due date for filing the audit report is 30th September of the Assessment year. Example: For FY 2023-24 the due date for filing Form 10B/Form 10BB is 30th September, 2024.

Furthermore, we are pleased to share that we have covered an insightful article on Tax Compliance Simplified: Audit Report - Form 10B/ 10BB this month.

Yes, an NGO can accumulate funds at year-end through the use of Form 9A and Form 10. Form 9A facilitates accumulation for up to 1 year, while Form 10 allows accumulation for up to 5 years, subject to the fulfillment of specific conditions.

Grant fund accounting is a system of accounting that helps NPOs manage funds designated for specific purposes. It is essential for maintaining donor trust, complying with regulations, and providing transparent reporting on fund usage. This ensures that money is allocated and spent according to the organization’s mission and donor intentions.

You can find more information an insightful article on Mastering Grant Fund Accounting: Basic, Benefits, Challenges, and Solutions -  Link here

Form 10B is needed if the total income exceeds ₹5 crore, or any foreign contributions are received, or income is applied outside India.

Form 10BB is required if the total income is up to ₹5 crore, no foreign contributions are received, and no income is applied outside India.

Yes. Any donation, delivery or transfer received from a ‘foreign source’ whether in rupees or in foreign currency is construed as ‘foreign contribution’ under FCRA, 2010. Such transactions even in rupee terms are considered as foreign contributions.

• Non-filing of Form 10BD incurs a late fee of Rs. 200 per day under section 234G of the Income Tax Act, 1961. This fee cannot exceed the donation amount. 

• The Assessing Officer may impose a penalty under section 271K, ranging from Rs. 10,000 to Rs. 1,00,000. Unfortunately, there's no relief from this penalty under section 273B, even with a reasonable cause. 

• Donors won't qualify for tax benefits under section 80G of the Income Tax Act, 1961.

Furthermore, we are pleased to share that we have covered an insightful article on Decoding Forms 10BD and 10BE: A Must-Have for NGOs and Donors. You can access the article through our blogs.

While it's ideal to complete all payments funded by CSR donors by 31st March, accrued liabilities can also be included in the utilization report, even if payments are not made by this date. However, it's essential to provide a note explaining reasons for outstanding payments.

Furthermore, we are pleased to share that we have covered an insightful article on CSR Compliance Considerations for Unutilized funds for NGOs this month. You can access the article -  Link here.

In this article, we delve into key considerations for implementing NGOs regarding unspent CSR funds under Companies Act, 2013 / CSR Rules.

• Single-year projects: These agreements conclude within the same financial year.

• Ongoing projects: These projects extend over multiple financial years, not exceeding three years excluding the year of commencement. They may include projects initially planned for one year but extended with board approval. Such extensions require reasonable justification.