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Fcra

Ayon Chowdhury (4 Points)

01 July 2016

Can we transfer the fund from FCRA account to Domestic account? Please mention the clause.

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CA FARHAT MIYAN (CA) (40 Points)
Replied 02 July 2016

Dear Mr Ayon Please Read it carefully,

(i) An organisation may use funds from domestic sources for FC projects.

(ii) A loan from domestic sources is not a receipt from foreign source. Therefore, it should not be received in the designated bank account. The expenditure can be directly made from the domestic bank account and booked as expenditure in the local books of accounts and should be shown as utilised in local books only. It should not be reported in FC. However, only for the purposes of reporting to the donor, such expenditure can be included in the utilisation statement. The auditor may put a footnote that certain amount was spent in the local books of account.

(iii) When the funds are received from foreign sources, the liability can be repaid directly to designated bank account if it is external. No transfer or transaction is necessary if the loan was taken from internal sources/general fund.

(iv) Any loan from domestic sources is apparently not a foreign contribution. Therefore, it should not be reflected in Form FC-6, or the FC Receipt and Payment Account or even in the FC books of account.