an organisation which is registered under FCRA has 12cr opening balance of fund and 13 cr receipts..
It has spent 20% of 25cr (12+13) towards admin expenses.
But the portal is calculating 20% on donations received during the year and hence the admin expenses is exceeding 30%.
How to resolve this?
Admin expenses can be 20% of only FC receipts during a financial year without any addition of opening balance etc. If Rs.13 cr is the total receipts, eligible admin exp at 20% will be Rs.2.6 cr, any excess will result in violation of Section 8 read of the Act with Rule 5.
Please be clear that for admin expense threshold of 20%, admin exp paid is the numerator while FC receipts during the year is the denominator. There should be no other basis as denominator. That is why effective 1.1.2025, MHA has allowed carry forward of unutilised amin expense only to the subsequent year.
CS Sharad Bhargava