FCRA:A Tragedy for NGO’s
11,000 NGO’s got their licence to accept foreign funds cancelled.The question arises, why?Lets discuss in detail, what happened,what is government’s take on the issue.
NGO’s in India are divided into 3 segments
1.Societies -They are registered under Center’s Societies Registration Act 1860 or a state government’s version of law.
2.Trust-Private Trust are registered under Central Government Indian Trusts Act,1882 & Public are registered under state legislation concerned.
3. Charitables-They are treated as companies established under section 8 of companies Act of 2013.
Therr is an another division called religious Institutions, which are governed under laws like Wakf Act 1995 and Religious Act 1920.
All such NGO’s come under the compliance of Income Tax Act,1961. Socities & Trusts are allowed to get exemption but charitable company has to pay taxes,according to figures stated in its balance sheet & according to various other laws.
As per FCRA(Foreign Compliance Regulation Act),any NGO which gets donations or funding from outside India should register with central government.Also the amount can be accepted only through few designated banks.All the funding should be reported within 30 days of receipt, giving all details like amount,mode, purpose & utilisations. In.In case of non compliance,Government has all rights to penalise or cancell the license of NGO. Also if NGO’s fails to file annual returns,action can be taken against them.
What NGO’s have to say about this?
Lack of finance to comply with,low manpower,shortage of skilled people like auditors,Inadequate information from Government’s side,Unawareness etc are some of the factors because of which it gets difficult for them to comply with laws.