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

Ramesh receives currency from a foreign source on behalf of Satya Mahila Mandal, an organisation of the kind referred to in section 9. He is asked to hand it over to Dharti Trust instead, and he knows that Dharti Trust will not give it to Satya Mahila Mandal. Under section 3(3), what is the position?

Ramesh must not deliver the currency to Dharti Trust. Section 3(3) forbids a person receiving foreign currency on behalf of a section 9 person from delivering it to anyone other than the person for whom it was received. Charitable status, records or small amounts create no exception.

  1. AHe may deliver it, provided Dharti Trust is also a charitable body
  2. BHe may deliver it after keeping a written record of the instruction
  3. CHe may deliver it if the amount is below a prescribed limit
  4. DHe must not deliver it to anyone other than the person for whom it was receivedCorrect

Explanation

Section 3(3) bars a person who receives foreign currency on behalf of a person or class referred to in section 9 from delivering it to anyone other than the person for whom it was received. It also bars delivery to another person if he knows or has reasonable cause to believe the recipient is likely to pass it on elsewhere. The other options add exceptions that the text does not contain.

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