Circular: 15/2024 July 06, 2024
The Parish Priests and Priests in-charge
Diocese of Nashik
My dear Collaborators,
I am sending you summarized notes of the discussions we had on Financial Matters on Thursday, June 27, 2024 at Bishop’s House, Nashik. In view of the laws changing and becoming stringent, I am earnestly requesting you to follow the enclosed notes and all that is expected of you as Parish Priest/Priest in-charge.
I am confident of your wholehearted collaboration and thank you for all that you are doing in your parishes.
God bless you and with every good wish,
Yours in Christ,
+Barthol Barretto Bishop, Diocese of Nashik
Encl.: a.a.
Points for Discussion with the Parish Priests of Nashik Diocese
June 27, 2024
Regulatory and Compliance
1. Trust Deed – Where Trust Deed is not available (applicable to Trusts created prior to 1950), the Application for registration filed with the Charity Commissioner)
2. PAN – Permanent Account Number in the name of the Trust
3. TAN – Tax Deduction and Collection Account Number of the Trust
4. DARPAN Registration - Non-Government Organizations (NGOs)/ Non-Profit Organizations (NPOs) having savings/ current accounts have been requested by Banks for details of their Unique Identification Number (UIN) with Niti Aayog’s NGO Darpan.
NGO Darpan registration is now applicable to all NGOs/NPOs and onus of ensuring such registration has now been placed on banks. Banks may include DARPAN registration as part of mandatory documents required for KYC. The registration can be done online on: https://ngodarpan.gov.in/
5. FCRA (Foreign Contribution Regulation Act) Registration for the Trust
Registration under FCRA is compulsory for accepting Foreign Contributions
FCRA certificate is valid for a period of 5 years
A Foreign Contribution (FC) designated bank account should be opened with State Bank of India, New Delhi Main Branch
FC should be received only in the exclusive single FC account of a Bank (also called designated FC account) – ie State Bank of of India, New Delhi Main Branch
One or more accounts called utilization account in one or more banks may be opened by the Trust for utilizing the foreign contribution after it has been received in the designated FCRA Account
No bar in transferring foreign contribution between utilization accounts however, a proper record of the same should be maintained
FC deposited in a local bank account by mistake can trigger penalty of INR 1,00,000/- or 10% of the FC received whichever is higher
Penalty for received and depositing any fund other than FC in the account opened for receiving FC is INR 1,00,000 or 2% of such deposit whichever is higher
Annual return in FC -4 has to be submitted annually for the period 1 April to 31 March within a period of 9 months from the closure of the year ie by 31 December each year
6. GST Registration – In case taxable turnover exceeds the prescribed limit of INR 40 lakhs. (20 lacs in case of Services) If trust is having GSTIN, then it is required to furnish GST returns monthly and annually
7. The Minute Books of the Trust, Parish Pastoral Committee, Parish Finance Committee and other Bodies where Minutes are being maintained should be brought up to date
8. Income Tax Returns - The annual return of income in form ITR-7 is required to be filed every year. Form 10B is to be furnished by a charitable or religious trust or institution that has been registered u/s 12A
9. Annual Budget to be filed with the Charity Commissioner one month before the commencement of the financial year
10. Audit of Accounts
If the total income exceeds the basic exemption limit of INR 2,50,000 (currently) then books of accounts are required to be audited by a Chartered Accountant, to avail exemption under Section 11 and Section 12 of the Income Tax Act, 1961
Audit of Trust in form 10B/ 10BB (applicable to medical and educational institutions) is compulsory in the following cases - If the total income of the trust or institution, exceeds rupees five crores during the previous year;
or If such trust or institution has received any foreign contribution during the previous year;
or If such trust or institution has applied any part of its income outside India during the previous year.
11. Title Deeds of Immoveable Properties:- 7 / 12 Extracts; Lease Deed, Sale Deed, Property Tax Payment Acknowledgement; Electricity Bill & Payment Acknowledgement
12. Monthly Bank Reconciliation Statements to maintain control
13. Cash In Hand – To be counted and tallied with books of account at the end of the relevant financial year
14. Where there are Sole Trusteeship, it is highly recommended to avail the Scheme by the Charity Commissioner and transform the Trust into Multiple Trusteeship with a New Trust Deed (part of the Scheme).
Transaction Supporting Documents
1. Donation Receipts
Each Donation must be accompanied with a signed covering letter from the Donor which may include the details of the Donor such as Name and address of Donor, PAN of Donor, Amount of Donation, Purpose of Donation (whether Corpus or General) etc.
Alternatively, a Donation Form including the required fields may be provided to the donor. The donor may send the donation amount along with a covering letter and the Donation Form duly filled in and signed;
It is advisable to avoid receiving cash donations and if so received, complete donor details/ documentation as mentioned above must be maintained
On donation receipts above INR 5,000/- revenue stamp is required to be affixed in accordance with provisions of the Indian Stamp Act.
2. Donation Payments
An application letter requesting for the amount of donation along with the purpose for which the donation is needed is essential to be kept on records
In case the Donee is an individual - details of the individual such as PAN, Aadhar Card, letter of recommendation from the Parish or reference
In case the Donee is a Trust – Trust registration certificate, Form 10AC and PAN of the Trust may also be needed. Further, a utilization certificate may be requested from the Donee periodically
The payment vouchers for donation payments need to be signed by the Authorized Signatory. The Authorized signatory must be authorized by the Trustees by passing a resolution to that effect along with the sanction limit for approval.
3. Cash Transactions
Under section 269ST of the Income Tax Act, 1961, no person is allowed to receive an amount of INR 2 lakhs or more in cash:
In aggregate from a person in a day; or
In respect of a single transaction; or
In respect of transactions relating to one event or occasion from a person
Section 269ST attracts a penalty equal to the amount of cash received
As per section 40A(3) of the Income Tax Act, 1961 - Cash payment exceeding INR 10,000 will be disallowed as application of income.
Further, cash withdrawal limit for FCRA Account is INR 2,000/- and hence cash transactions from FCRA bank account must be altogether avoided.
FR AVIN FRANKLIN Financial Administrator Archdiocese of Bombay