New guidlines from FCRA Division

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A.Renganathan A.Renganathan

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Oct 29, 2014, 9:55:18 PM10/29/14

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Dear friends:

The MHA, FCRA Division vide its F. No. II/ 21022/ 58(136) /2014 -FCRA (MU) dated 21st October 2014 has issued Advisory Note to all FCRA registered / Prior Permission granted organizations to NOT to incur any expenditure in CASH above Rs. 20000.

As most of you is aware, that according to section 40 (A)(3) of the Income Tax Act, already any organization should make payments only by way of cheque or demand draft or bank transfer for any transaction over and above Rs. 20000.

Now the same thumb rule is insisted for FCRA registered organizations also. If any organization is violating this, they may have to face the scrutiny of FCRA Divsion, MHA, Govt of India.

Accountaid Mr. Sanjay Agarwal has said "If you ignore this warning, and continue drawing large amounts of cash from FCRA bank account, be prepared to face deeper scrutiny. Usually this means a polite invitation to visit FCRA office in Delhi with all your books and accounts. This can be quite an experience".

I am attaching herewith the FCRA Circular for your ready reference.

Thanks

Renganathan

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