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CS Executive · Economic, Commercial and Intellectual Property Laws · Law relating to Foreign Contribution Regulation

Hope Trust, a registered NGO, receives foreign contribution of Rs 50,00,000 in a financial year. Under the Act as given, up to what amount can it meet administrative expenses from this contribution without prior approval of the Central Government?

The NGO can use up to Rs 10,00,000 for administrative expenses. Section 8 caps such expenses at twenty per cent of foreign contribution received in a financial year, and twenty per cent of Rs 50,00,000 is Rs 10,00,000. Anything more needs prior Central Government approval.

  1. ARs 10,00,000Correct
  2. BRs 25,00,000
  3. CRs 12,50,000
  4. DRs 20,00,000

Explanation

Section 8(1)(b) sets the ceiling for administrative expenses at twenty per cent of the contribution received in a financial year. Twenty per cent of Rs 50,00,000 is Rs 10,00,000. Rs 25,00,000 reflects the old fifty per cent limit, which was substituted w.e.f. 29-9-2020.

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