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FREQUENTLY ASKED QUESTIONS

Understanding CSR Project Duration

CSR

Question

What is the difference between Single-year and Ongoing projects?

Answer
  • 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.

Reporting Fund Utilization

CSR

Question

Is it necessary that all payments (funded by CSR donors) should be made by 31st March for it to be claimed in the utilization report to be submitted to the donors?

Answer

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.

Understanding the consequences of Non-Filing of Form 10BD

Income tax, Form 10BD/10BE

Question

What are the Consequences of Non-filing of Form 10BD?

Answer
  • 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.

Currency and FCRA

FCRA

Question

Can foreign contributions be received in Indian currency (rupees)?

Answer

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.

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Our editorial team will also give its views on one generic, commonly faced legal query sent by the readers.

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