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

Sahyog Foundation, a registered person, wants to spend Rs 30,00,000 of a Rs 1,00,00,000 foreign contribution received in a year on administrative expenses. What does the Act as given require?

The foundation needs prior approval of the Central Government for the excess. Administrative expenses are capped at twenty per cent of the contribution received in the financial year, here Rs 20,00,000, and the proviso permits spending above that only with prior approval.

  1. ANothing further, as the limit is thirty per cent
  2. BPrior approval of the Central Government for the amount exceeding twenty per centCorrect
  3. CIntimation to the Central Government after the year ends
  4. DApproval only if the amount exceeds fifty per cent

Explanation

The limit is twenty per cent, i.e. Rs 20,00,000. The proviso to Section 8(1)(b) allows expenses beyond that only with prior approval of the Central Government. Post-year intimation is not the stated route, and fifty per cent is the superseded limit.

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