Donation by non resident to charitable trust

Others 2002 views 2 replies

Chandresh Sanat Jatania

Chartered Accountants

116 Points Joined July 2008

Hi,

The assessee is a Charitable Trust registered in India. Till date the trust has only accepted donation from select individuals forming a part of the family who formed the trust. The amount received as donation along with any income earned on investments (interest on bank FDs) is utilized and distributed by the trustees for the purpose of the trust.

A family member who is a Non resident as per the Indian Income Tax Act wants to give donation to the trust. The questions are as under:

Can the trust take donation from such an individual?

If yes, is there any monetary limit prescribed for the amount that can be taken as donation?

Is there a particular type of bank account prescribed from which donation needs to be received e.g. NRE, NRO, Saving Bank, Account held in a foreign country, cash, etc.

What additional information will the Trust need to collect for such type of donations?

Are there any specific reporting requirements to be adhered to by the trusts?

Please feel free to add to any additional point to be considered / taken care of in the above.

Thank you all in advance for all your responses,

CA CSJ

Replies (2)

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

FCRA registration is required to accept any foreign fund in indian trust / society / NGO

Chandresh Sanat Jatania

Chartered Accountants

116 Points Joined July 2008

Dear Mr. Sharma,

Thank you for the reply. As I understand under Section 6 of FCRA, it is clearly provided that any organisation having a definite cultural/ social/ educational/ religious/ economic object shall only accept foreign contribution after satisfying two conditions :

(i) The trust must registers itself with the Central Government
(ii) It must agrees to receive foreign contribution only through one specific bank account

In this case the trust is already registered under the Indian Trust Act and also issues 80G certificate.

Will the trust need to get a new certification? If yes. with whom?

The trust has three bank accounts in which it deposits the donation cheques received.

Will the trust need to open a new saving bank account to accept the donation from a non resident?

Is the registration / opening of a new account also required if the donation is received in INR from the non resident through his saving bank account held in india.

Thank you in advance for your replies on the above additional queries

Best Regards,

CA CSJ