Quick Summary
The Foreigner's Division of the Union Ministry of Home Affairs (MHA) has introduced new regulations requiring Chartered Accountants (CAs) to include specific declarations regarding compliance with the Foreign Contribution (Regulation) Act, 2010 (FCRA) when filing audit returns for NGOs. This move aims to enhance transparency and accountability in the utilization of foreign contributions. Key Highlights of the Notification Mandatory Declarations by CAs: CAs must now explicitly state whether
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FAQ :
Chartered Accountants must now include specific declarations in NGO audit returns, stating whether the NGO has violated any provisions of the Foreign Contribution (Regulation) Act (FCRA) or its associated rules.
The audit certificate must include the auditor's name, email address, and registration number.
CAs must certify whether the foreign funds received by the NGO were utilised for the purposes for which the NGO was registered.
Yes, NGOs can carry forward unspent permissible administrative expenses, capped at 20% of foreign contributions, to the next financial year, provided they are kept in a designated State Bank of India (SBI) account.
NGOs are concerned that the new rules might make it more difficult for voluntary organisations, particularly those critical of the government, to find auditors willing to certify compliance.
Since 2015, over 16,000 NGOs have reportedly lost their FCRA registration due to alleged violations of the Act.
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