The non-government organisations (NGOs), which have recently come under the scrutiny of the Modi government, will now have to pay a penalty of up to Rs 10 lakh if they fail to file their annual returns, according to a recently notified rule by the Union home ministry.
As per the latest notification, the NGOs will have to pay either a penalty of 10% of the amount of foreign contribution received during a financial year or Rs 10 lakh, whichever is less, if they fail to furnish the annual return after two years and up to three years. The Central Bureau of Investigation in its report submitted before the Supreme Court last year has said “less than 10% of the 29-lakh registered NGOs across the country file their annual income and expenditure statements”.
While revising the rules formulated for penalties in 2013, MHA also enhanced the fine from Rs 50,000 to Rs 2 lakh for an NGO if it fails to furnish the details after 6 months to a year from December 31 every year. The penalty after one year and up to two years of not filing the annual returns have been increased to Rs 5 lakh or 5% of the foreign donation received, whichever is less. According to 2013 rules, the fine was Rs 10,000 or 2% of the foreign contribution if an NGO failed to furnish their accounts up to 3 months.
After three months and up to 6 months, the penalty was Rs 20,000 or 3% of the money received.
For NGOs who did not submit their annual statement even after 6 months, the fine was 50,000 with addition of Rs 500 per day after 6 months, as per 2013 rules. Last year, the home ministry simplified the Foreign Contribution Regulation Rules making it easier for NGOs to file their returns online, reducing human interface to zero.