Hospitals are running out of beds for Covid-19 patients; oxygen concentrators and cylinders are in high demand; vital medicines are out of stock; a large percentage of the population is yet to be vaccinated; This unprecedented situation in most parts of India is a contemporary reality. The experts, executives, and administrators of the Central and State governments are running from pillar to post to manage the situation well with our limited resources, ensuring minimal loss of lives.
The situation has also activated many self-motivated volunteers across the country who have come forward to help mitigate this human suffering in multiple ways. Such generosity demonstrates that the essential goodness of humanity is still alive and active, which Is the greatest solace and hope amidst
this pandemic. Several voluntary organizations, not for profit institutions, and NGOs are assisting local efforts in a substantive manner, by providing oxygen concentrators, food, and moral support
Donations within India:
The timely contribution of voluntary and charitable organizations is very significant in shoring up voluntary contributions from philanthropists and spontaneous donations from well-wishers during this health crisis. It is pertinent to note that the donors with their unprecedented support are making a strong testimony to mankind, in a ‘never say die spirit.
The charitable institutions that are registered with the Income Tax Department under Section 12 A of the Income Tax Act, 1961 are exempt from paying taxes to the Government on their resources utilized for charitable causes. Additionally, if a charitable institution has obtained statutory approval under
section 80 G, the donors are also entitled to a deduction towards such voluntary contributions while computing their taxable income. However, it is imperative to note that the number of donations received by a charitable trust or institution can only be from an Indian citizen or an entity within India, and in the ordinary course of activities, monetary contributions cannot be received from a source outside India. Any donation from a Non-resident Indian who is a foreign national can be received only if the recipient’s charitable trust or institution is registered under FCRA (Foreign Contribution Regulation Act, 2010).
Trust has to get itself registered under the Foreign Contribution (Regulation) Act with the Ministry of Home Affairs in addition to the regulatory control exercised by the Ministry of Finance. With a view to check terror funding and shadow funding of illegal and illegitimate activities, the Government has established strict monitoring protocols for such foreign contributions. The intent is laudable,
as it fortifies national security. As of date, there are only 49,945 charitable Trusts and institutions throughout the country, that is duly registered under FCRA. Recently, the legislature has further tightened the provisions of FCRA by making fresh amendments to the FCRA in the year 2020, purportedly in line with the objective of protecting India’s national interests.
A company that has a net worth of ₹500 Crores or more; a turnover of ₹1000 Crores or more; a Net Profit of ₹5 Crores or more during the immediately preceding Financial Year, is statutorily required to contribute at least 2% of its average profits of the past 3 years towards Corporate Social Responsibility (CSR).
There are activities specified under the Indian Companies Act, that may be carried out as a part of the CSR efforts in and around the areas where a company operates, based on the company’s understanding of the local requirements. India being a pioneer in the world to introduce the CSR initiative early on, has the objective of demonstrating that the local community gets supported by the CSR efforts of corporate bodies as a measure of social responsibility, besides realizing the due taxes paid by the company. As taxes go to the Government exchequer and get utilized in the balanced developmental the entire country, corporate bodies are encouraged through the CSR initiative to cater to the local needs of the immediate community they serve, which in turn gives the corporates a sense of contribution to the society and it also results in an enhancement of their brand value. The recent amendments made in the CSR-related laws brought COVID-19 related relief measures within the purview of CSR.
Relax FCRA Norms:
Today, the Indian diaspora settled abroad intends to help India and in turn, their near and dear ones living in their original places of domicile in India. Many such persons of Indian origin living abroad have sincerely expressed their wish and willingness to donate to the public charitable trusts and institutions that are known to them in India and are best serving the people during this humanitarian crisis in such towns and villages that they once called home. However, though such charitable trusts and institutions may hold registrations under section 12 A or Section 80 G of the Income Tax Act, 1961, they are constrained from receiving donations from abroad, as they are not registered under the FCRA.
It will bring great relief to such charitable trusts and institutions if a temporary relaxation is made by the government, at least for a short period of time so as to enable such charitable institutions to receive foreign contributions intended for Covid-19 relief. All such charitable trusts and institutions have already been approved by the Ministry of Finance through a due registration process carried out
by the Income Tax Department and therefore, a special provision may be introduced by way of an Ordinance or through delegated legislation, enabling such foreign contributions with sufficient safeguards to monitor the end-use of the funds meant for COVID-19 relief, which would sufficiently serve the objective.
Temporarily, the Ministry of Finance may also consider and explore the possibility of allowing Foreign contributions to charitable trusts and institutions without the statutory requirement of FCRA registration, as this will be of immense help in our war against COVID-19. An alternate system of monitoring may be evolved to ensure that the foreign donors’ funds are effectively utilized
for the purposes intended.
Unprecedented times call for out-of-the-box solutions. We need to muster all our resources at every level to win this unfortunate battle of disease and death thrust upon us. Every little effort through which we contribute will go a long way in mitigating the suffering. To quote Daryn Kagan – Bad things do happen in the world, like war, natural disasters, disease. But out of those situations always arise stories of ordinary people doing extraordinary things.
Today, it appears that our battle against Covid may be a long-drawn-out one and by no means easy, but with each contribution small or large that adds up to help humanity, we will eventually win.