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CS Professional · CSR and Social Governance · Foreign Funding to Non-Corporate Entities

Mehta Seva Trust, a registered FCRA entity, received a foreign contribution of Rs 40 lakh. Its trustees want to pass Rs 10 lakh of it to another charitable society, Asha Samiti, to run a joint programme. Under the Act as amended in 2020, what is the position?

The trust cannot transfer the foreign contribution to anyone else. Section 7, as substituted in 2020, bars every registered or prior-permission holder from passing on foreign contribution to any other person, without exceptions for registered recipients, intimation to the Government, or small amounts.

  1. AThe transfer is allowed if Asha Samiti is also a registered society
  2. BThe transfer is allowed if the trust informs the Central Government within 30 days
  3. CThe transfer is allowed only if the amount is below 25% of the contribution
  4. DThe trust cannot transfer the foreign contribution to any other personCorrect

Explanation

Section 7, as substituted in 2020, says a person who is registered or has prior permission and receives foreign contribution shall not transfer it to any other person. There is no carve-out for registered recipients, intimation, or a percentage limit, so the other options wrongly invent exceptions.

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