FC Faq 07062019 PDF
FC Faq 07062019 PDF
FC Faq 07062019 PDF
in
Q.2 What are the various acts/rules/guidelines which regulate the flow of foreign
contribution to India?
Ans. The flow of foreign contribution to India is regulated under Foreign Contribution
(Regulation) Act, 2010, Foreign Contribution (Regulation) Rules, 2010 read with and other
notification / orders etc., issued there under from time to time. These are available at the
website fcraonline.nic.in.
Q.3 What is the status of the FCRA, 1976 after coming of FCRA, 2010?
Ans. It has been repealed.
A. Foreign Contribution
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Explanation 3 ‒ Any amount received, by any person from any foreign source in India, by
way of fee (including fees charged by an educational institution in India from foreign
student) or towards cost in lieu of goods or services rendered by such person in the
ordinary course of his business, trade or commerce whether within India or outside India
or any contribution received from an agent or a foreign source towards such fee or cost
shall be excluded from the definition of foreign contribution within the meaning of this
clause.
* In terms of FCRA, 2010 "person" includes ‒
• (i) an individual;
• (ii) a Hindu undivided family;
• (iii) an association;
• (iv) a company registered under section 25 of the Companies Act, 1956 (now Section
8 of Companies Act, 2013).
•
Q.2 Who can receive foreign contribution?
Ans. Any “Person” can receive foreign contribution subject to following conditions:-
• a) It must have a definite cultural, economic, educational, religious or social
programme.
• b) It must obtain the FCRA registration / prior permission from the Central Government
• c) It must not be prohibited under Section 3 of FCRA, 2010.
Q.5 Will interest or any other income earned from foreign contribution be
considered foreign contribution?
Ans. Yes. It will become part of F.C. please see Explanation 2 under Question 1.
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Q.6 Whether interest or any other income earned out of foreign contributions be
shown as fresh foreign contribution receipt during that year or not?
Ans. No. The interest or any other income earned out of such deposit should be shown
against Column 2(i)(b) in the annual return (Form FC-4) during the year in which it is
earned. Such interest or income would be considered as F.C.
Q.7 Whether earnings from foreign client(s) by a person in lieu of goods sold or a
service rendered by it is treated as foreign contribution?
Ans. No. As clarified at Explanation 3 under section 2 (1) (h), foreign contribution excludes
earnings from foreign client(s) by a person in lieu of goods sold or services rendered by it
as this is a transaction of commercial nature/quid pro quo.
Q.9 Whether donation given by an individual of Indian origin and having foreign
nationality is treated as ‘foreign contribution’?
Ans. Yes. Donation from an Indian origin person who has acquired foreign citizenship is
treated as foreign contribution. This will also apply to PIO / OCI cardholders. However,
this will not apply to 'Non-resident Indians', who still hold Indian citizenship and they are
not foreigners.
Q.11 Whether individuals not covered under Section 3 or a HUF can accept foreign
contribution freely for the purposes listed in section 4 of FCRA, 2010?
Ans. Yes. Since, subject to the provisions of Section 10, even the persons specified under
section 3, i.e., persons not permitted to accept foreign contribution, are allowed to receive
foreign contribution for the purposes listed in section 4, it is obvious that Individuals in
general and a HUF are permitted to accept foreign contribution without permission for the
purposes listed in section 4. However, it should be borne in mind that the monetary limit
for acceptance of foreign contribution in the form of any article given as gift to a person for
his personal use has been specified as Rs. 25,000/ vide FCR Amendment Rules, 2012.
Q.12 Can the fee paid by the foreign delegates/participants attending/participating
in a conference/seminar etc. be termed as foreign contribution and thus require
permission from FCRA?
Ans. No. “Delegate/participation Fees” paid by foreign delegates/participants for
participation in a conference/seminar and which is utilized for the purpose of meeting the
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Q.13 Section 2(c)(i) of repealed FCRA, 1976 inter alia defined foreign contribution
as the donation, delivery or transfer made by any foreign source of any article, not
given to a person as a gift for personal use, if the market value, in India, of such
article exceeds one thousand rupees. What limit has been prescribed in FCRA, 2010
in respect of such articles?
Ans. The limit has been specified as Rs. 25000/- through insertion of the following Rule
6A in FCRR, 2011 vide the Foreign Contribution (Regulation) Amendment Rules, 2012
[G.S.R. 292 (E) dated 12th April, 2012]:
"6A. When articles gifted for personal use do not amount to foreign contribution. - Any
article gifted to a person for his personal use whose market value in India on the date of
such gift does not exceed rupees twenty-five thousand shall not be a foreign contribution
within the meaning of sub-clause (i) of clause (h) of sub-section (1) of section (2)."
B. Foreign Source
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Q.2 Whether an Individual of Indian Origin who has acquired foreign nationality is
treated as foreign source?
Ans. Yes. The contribution received from all the non- Indian Passport Holders are treated
“Foreign Source.”
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A. Eligibility
• Q.3 What are the eligibility criteria for grant of prior permission?
Ans. An organization in formative stage is not eligible for registration. Such
organization may apply for grant of prior permission under FCRA, 2010.
Prior permission is granted for receipt of a specific amount from a specific donor for
carrying out specific activities/projects. For this purpose, the association should meet
following criteria:
• (i) be registered under an existing statute like the Societies Registration Act, 1860 or
the Indian Trusts Act, 1882 or section 25 of the Companies Act, 1956 etc;
• (ii) submit a specific commitment letter from the donor indicating the amount of foreign
contribution and the purpose for which it is proposed to be given; and
• (iii)For Indian recipient organizations and foreign donor organizations having common
members, FCRA Prior Permission shall be granted to the Indian recipient
organizations subject to its satisfying the following:
• i) The Chief Functionary of the recipient Indian organization should not be a part of the
donor organization.
• ii) At least 75% of the office-bearers/ members of the Governing body of the Indian
recipient organization should not be members/employees of the foreign donor
organization.
• iii) In case of foreign donor organization being a single person/individual that person
should not be the Chief Functionary or office bearer of the recipient Indian
organization.
• iv) In case of a single foreign donor, at least 75% office bearers/members of the
governing body of the recipient organization should not be the family members and
close relatives of the donor.
Q.4 What are the conditions to be met for the grant of registration and prior
permission?
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Ans. In terms of Sec.12 (4) of FCRA, 2010, the following shall be the conditions for the
grant of registration and prior permission:
(a) The 'person' making an application for registration or grant of prior permission-
• i. is not fictitious or benami;
• ii. has not been prosecuted or convicted for indulging in activities aimed at conversion
through inducement or force, either directly or indirectly, from one religious faith to
another;
• iii. has not been prosecuted or convicted for creating communal tension or disharmony
in any specified district or any other part of the country;
• iv. has not been found guilty of diversion or mis-utilisation of its funds;
• v. is not engaged or likely to engage in propagation of sedition or advocate violent
methods to achieve its ends;
• vi. is not likely to use the foreign contribution for personal gains or divert it for
undesirable purposes;
• vii. has not contravened any of the provisions of this Act;
• viii. has not been prohibited from accepting foreign contribution;
• ix. the person being an individual, such individual has neither been convicted under
any law for the time being in force nor any prosecution for any offence is pending
against him.
• x. the person being other than an individual, any of its directors or office bearers has
neither been convicted under any law for the time being in force nor any prosecution
for any offence is pending against him.
(b) the acceptance of foreign contribution by the association/ person is not likely to affect
prejudicially –
• i. the sovereignty and integrity of India;
• ii. the security, strategic, scientific or economic interest of the State;
• iii. the public interest;
• iv. freedom or fairness of election to any Legislature;
• v. friendly relation with any foreign State;
• vi. harmony between religious, racial, social, linguistic, regional groups, castes or
communities.
(c) the acceptance of foreign contribution-
• i. shall not lead to incitement of an offence;
• ii. shall not endanger the life or physical safety of any person.
Q.5 Can a private limited company or a partnership firm get registration or prior
permission under FCRA, 2010?
Ans. Yes, a private limited company too may seek prior permission/registration for
receiving foreign funds in case they wish to do some work useful to society at some point
of time.
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Ans. Yes. However, all bodies constituted or established by or under a Central Act or a
State act requiring to have their accounts compulsorily audited by Comptroller & Auditor
General of India are exempted from the operations of all the provisions of FCRA, 2010.
B. Executive Committee
Q.10 Whether the registration certificate or prior permission granted under the
repealed FCRA, 1976 shall remain valid when FCRA, 2010 has come into force?
Ans. Yes. An association granted prior permission or registration under the repealed
FCRA, 1976 shall be deemed to have been registered or granted prior permission, as the
case may be, under FCRA, 2010. Registration granted under FCRA, 1976 shall remain
valid for a period of 5 years from the 1st May, 2011, i.e., up to the 30th April, 2016.
Q. 11 Whether prior permission granted under FCRA, 1976 would also remain valid
for next 5 years from the 1st May, 2011, i.e., the date when FCRA, 2010 came into
force?
Ans. No. Prior permission granted under FCRA, 1976 is also remains valid under FCRA,
2010 till receipt and full utilisation of the amount of FC for which the permission was/is
granted.
D. How to apply
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Q.3 How to fill online form for filing application for grant of registration / prior
permission?
Ans. The online application form FC-3 (A) for registration / FC-3 (B) prior permission has
been designed in an easy to fill format. The applicant will find detached instructions on
each web page of online form while filing the application.
Q.4 How to rectify an error in the application for registration or PP that has already
been submitted online?
Ans. No rectification of error is allowed after the application has been finally submitted
online. In case of error, please Contact Support Centre/ Help Desk of the FCRA.
D. Required documents
Q.1 What are the documents to be uploaded with the application for grant of
registration?
Ans. The applicant should be ready with the scanned copies of the following documents
before filing the application online:
(A) Registration
• (i) jpg file of signature of the chief functionary (size: 50kb)
• (ii) self-certified copy of registration certificate/Trust deed etc., of the association
(size:1mb)
• (iii) self-certified copy of relevant pages of Memorandum of Association/ Article of
Association showing aim and objects of the association. (size:5mb)
• (iv) Activity Report indicating details of activities during the last three years; (size:3mb)
• (v) Copies of relevant audited statement of accounts for the past three years (Assets
and Liabilities, Receipt and Payment, Income and Expenditure) clearly reflecting
expenditure incurred on aims and objects of the association and on administrative
expenditure; (size:5mb)
• (vi) Fee of Rs. 5000/- is to be paid online through payment gateway
(B) Prior Permission
• (i) jpg file of signature of the chief functionary (size:50kb)
• (ii) self-certified copy of registration certificate/Trust deed etc., of the association
(size:1mb)
• (iii) duly signed Commitment Letter from Donor. (size:5mb)
• (iv) If functioning as editor, owner, printer or publisher of a publication registered under
the Press and Registration of Books Act, 1867, a certificate from the Registrar of
Newspapers for India that the publication is not a newspaper in terms of section 1(1)
of the said Act.
• (v) Fee of Rs. 3000/- is to be paid online through payment gateway.
• (vi) Project Report for which FC will be received. (size:3mb)
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Q.7 What all pages of MoA are to be uploaded in the online form FC-3?
Ans. A Memorandum of Association (MOA) is a legal document prepared in the formation
and registration process of a limited liability company to define its relationship with
shareholders. The MOA is accessible to the public and describes the company’s name,
physical address of registered office, names of shareholders and the distribution of
shares, The MOA and the Articles of
Association serve as the constitution of the company.
Q.8 What is the form of Audited Statements which are to be uploaded with the FC-
3 Form?
Ans. An Audit statement of accounts for the past three years (Assets and Liabilities,
Receipt and Payment, Income and Expenditure) clearly reflecting expenditure incurred on
aims and objects of the association and on administrative, duly signed by the chartered
Accountant with his membership number.
Q.1 What is the amount of fee for grant of registration and prior permission and
renewal?
Ans. For registration the association is required to pay a fee of Rs. 5,000/- and for prior
permission, the fee is Rs. 3,000/- and for renewal, the fee is Rs 1500/- only.
Q.2 How to make payment of fee. Can the fee be paid through Bank draft/cheque
etc.
Ans. The fee is to be paid while filling online form through payment gateway. No Bank
draft/cheque is accepted.
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A. Acceptance
Q.2 Are there any banned organisations from whom foreign contribution should not
be accepted?
Yes. FCRA is meant to ensure that foreign contribution is received from legitimate sources
and utilised for legitimate purposes by any person.
Q.3 Whether the amount of foreign contribution for which prior permission has been
granted can be received by an association in installments?
Ans. Yes. There is no bar on receiving such foreign contribution in installments. However,
the aggregate amount should not exceed the specified amount for which prior permission
has been granted.
The association shall have to submit the mandatory online return in FC-4 form for receipt
and utilization of the foreign contribution on a yearly basis, till the amount of foreign
contribution is fully utilized. Even if no transaction takes place during a year, a NIL return
should be submitted.
A. Administrative Expenses
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B. Utilisation of funds
Q.6 Can capital assets purchased with the help of foreign contributions be acquired
in the name of the office bearers of the association??
Ans. No. Every asset purchased with foreign contribution should be acquired and
possessed in the name of the association since an association has a separate legal entity
distinct from its members.
Q.8 Can foreign contribution be received in and utilised from multiple Bank
Accounts?
Ans. The foreign contribution should be received only in the exclusive single FC account
of a Bank (also called designated FC account), as mentioned in the order for registration
or prior permission granted and should be separately maintained by the associations.
However, one or more accounts (called Utilization Account) in one or more banks may be
opened by the association for ‘utilising’ the foreign contribution after it has been received
in the designated FCRA bank account, provided that no funds other than that foreign
contribution shall be received or deposited in such account or accounts and in all such
cases, intimation in FC-6Dis to be given online within 15 days of opening of such account.
Q.9 Can an association transfer foreign contribution from one utilization account to
another utilization account?
Ans. As such there is no bar for transferring FC from one uc a/c to another uc a/c.
However, the same be preferably avoided to keep the accounting process simple.
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• (a) is registered and granted a certificate or has obtained prior permission under this
Act; and
• (b) receives any foreign contribution, shall transfer such foreign contribution to any
other person unless such other person is also registered and had been granted the
certificate or obtained the prior permission under this Act:
Provided that such person may transfer, with the prior approval of the Central
Government, a part of such foreign contribution to any other person who has not been
granted a certificate or obtained permission under this Act in accordance with the rules
made by the Central Government.” Rule 24 of FCRR, 2011, as amended vide the Foreign
Contribution (Regulation) Amendment Rules, 2012 [G.S.R. 292 (E) dated 12th April, 2012]
prescribes the procedure for transferring foreign contribution as under:
"24. Procedure for transferring foreign contribution to any unregistered person. ─
• (1) A person who has been granted a certificate of registration or prior permission
under section 11 and intends to transfer part of the foreign contribution received by
him to a person who has not been granted a certificate of registration or prior
permission under the Act, may transfer such foreign contribution to an extent not
exceeding ten per cent of the total value thereof and for this purpose, make an
application to the Central Government in Form FC-5.
• (2) Every application made under sub-rule (1) shall be accompanied by a declaration
to the effect that-
(a) the amount proposed to be transferred during the financial year is less than ten per
cent of the total value of the foreign contribution received by him during the financial
year;
(b) the transferor shall not transfer any amount of foreign contribution until the Central
Government approves such transfer.
• (3) A person who has been granted a certificate of registration or prior permission
under section 11 shall not be required to seek the prior approval of the Central
Government for transferring the foreign contribution received by him to another person
who has been granted a certificate of registration or prior permission under the Act
provided that the recipient has not been proceeded against under any of the provisions
of the Act.
• (4) Both the transferor and the recipient shall be responsible for ensuring proper
utilisation of the foreign contribution so transferred and such transfer of foreign
contribution shall be reflected in the returns in Form FC-4 to be submitted by both the
transferor and the recipient."
Q.3 Whether inter-account funds transfer shall be allowed within the multiple
accounts that an Association is now permitted to open for the purpose of utilizing
the foreign contributions and the level of diligence required on the part of the Banks
in this regard?.
Ans. No. Transfer of funds is allowed from the designated FC account of an Association
to the multiple account or accounts opened for its utilization. However, no funds other than
the funds (FC) received in the designated FC account shall be received or deposited in
such multiple account or accounts. There in no bar in transferring foreign contribution
between the utilisation accounts. However, Association should preferably avoid such
practice for keeping the accounting process simple. The banks should apply full diligence
to keep track of the transfers.
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Q.4 How would an organisation that is registered or has obtained prior permission
under FCRA and intends to transfer a part of the foreign contribution received by it
to another organisation would know whether the recipient organisation has been
proceeded against under FCRA?
Ans. Where any organisation is proceeded against under FCRA, it is done with due
intimation to the organisation concerned. Therefore, the donor organisation is advised to
insist on a written undertaking from the intending recipient organisation.
Maintenance of Accounts
For further details, please refer to Rule 17 of the foreign contribution (Regulation) Rules,
2011 (FCRR, 2011)
Q.4 For how many years an association which has been granted prior permission
to receive foreign contribution should file the mandatory annual return?
Ans. The association should fill the mandatory annual return on a yearly basis, till the
amount of foreign contribution is fully utilized. Even if no transaction takes place during a
year, a NIL return should be submitted.
Q.5 What are the consequences of not filling the annual returns on time?
Ans. An association not filing annual return on time may face the following consequences:
• (1) Imposition of penalty for late submission of return.
• (2) Cancellation of registration
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Q.1 Are there any specified banks for the purpose of FCRA 2010?
Ans. Yes, It should be a PFMS integrated Bank. List of banks integrated with PFMS is
available at https://fcraonline.nic.in/fc_bank_list.aspx
Q.3 Whether Banks should allow an association which is applying for registration
or prior permission under FCRA, 2010 to open an exclusive FC A/c with INR?
Ans. Yes. However, the Banks should not allow any foreign inward remittance in that A/c
till such time the association is granted registration or prior permission, as the case may
be.
Q.4 Should the Banks report transactions pertaining to foreign contributions which
are returned to the remitter by the beneficiary Association for want of
registration/prior permission from MHA?
Ans. It is not necessary for the bank to report such foreign contribution that is returned to
the donor without crediting in the account of the recipient.
Q.5 Whether reporting by Banks is also applicable for transfer of funds between
FCRA accounts of two or more associations?
Ans. Yes. Reporting by Banks is also applicable to transfer of funds from one FCRA
registered Association to another.
Q.1 What is the procedure for seeking change FC-6 A in the name and or FC-6 B
aims and objects of an association registered under FCRA?
Ans. For seeking change in the name/address of the association, intimation is to be given
online in Form FC-6 within 15 days and self certified copy of amendment approved by
local/relevant authority is to be uploaded.
Q.2 What is the procedure for change of designated FC-6 C Bank Account?
Ans. For change of the bank account, an intimation is to be given online in Form FC-6 C
within 15 days of such change with uploading of certificates from the concerned banks
regarding the change.
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Renewal of registration .
Q.4 When should an Association which has been granted registration under FCRA
2010 apply for renewal of registration?
Ans. In terms of Rule 12 (2) of FCRR, 2011, an Association registered under FCRA should
apply in Form FC-3C for renewal of its registration six months before the date of expiry of
the certificate of registration.
Q.6 What happens if the association does not apply for renewal of registration?
Ans. The existing registration under FCRA, 2010, will cease from the date of completion
of the period of five years from the date of grant of registration and will not be eligible for
receiving of foreign contribution and will not be eligible for receiving of foreign contribution.
In such a case, the association has to apply afresh for grant of registration.
TABLE
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“The amount of penalty computed under column (3) of the Table in respect of any
offence or offences referred to in column (2) thereof shall not be more than the value of
the foreign contribution involved.”
Q.3 What if the person is unwilling or unable to pay the penalty imposed?
Ans: In the event of failure to pay the penalty, for whatever reason, necessary action for
prosecution of the person shall be initiated.
Q.4 Which are the investigating agencies for investigating and prosecuting a
person for violation of FCRA?
Ans. The Central Bureau of Investigation or the investigating agencies (Crime Branch) of
the State Governments, cause of action of which arises in their respective States, are the
designated agencies for investigating and prosecuting a person for violation of FCRA.
Q.1 Can the Government cancel the certificate of registration granted to a person
under FCRA?
Ans. Yes. Central Government may cancel the certificate as per the provisions of section
14 of the FCRA, 2010.
NOTE – Any person whose certificate has been cancelled under this section shall not be
eligible for registration or grant of prior permission for a period of three years from the date
of cancellation of such certificate.
Q.2 Can the Government suspend the certificate of registration granted to person
under FCRA?
Ans. Yes. Central Government may suspend the certificate as per the provisions of section
13 of the FCRA, 2010 for a period not exceeding one hundred and eighty days.
Q.3 What are the consequences of suspension of the registration certificate granted
to a person under FCRA?
Ans. A person whose FCRA registration certificate has been suspended shall:-
• (a) not receive any foreign contribution during the period of suspension of certificate;
provided that the central government specifically approves it on a case by case basis
• (b) not utilize the unutilized FC in his custody without the prior approval of the Central
Government. Even in this case, only up to twenty-five per cent of the unutilised amount
may be spent, with the prior approval of the Central Government, for the declared aims
and objects for which the foreign contribution was received. The remaining seventy-
five per cent of the unutilised foreign contribution shall be utilised only after revocation
of suspension of the certificate of registration.
Foreign Hospitality.
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Q.2 Who requires prior approval from Ministry of Home Affairs before accepting
Foreign Hospitality?
Ans. The following categories of persons require prior approval from Ministry of Home
Affairs before accepting Foreign Hospitality:-
• a) Members of a Legislature
• b) office bearers of political parties
• c) Judges
• d) Government servants
• e) Employees of any corporation or any other body owned or controlled by the
Government.
Provided that it shall not be necessary to obtain any such permission for an emergent
medical aide needed on account of sudden illness contracted during a visit outside
India.But, where such foreign hospitality has been received, the person receiving such
hospitality shall give an intimation to the Central Government as to the receipt of such
hospitality within one month from the date of receipt of such hospitality, and the source
from which, and the manner in which, such hospitality was received.
Q.3 Whether approval of the Ministry of Home Affairs is required in cases where the
proposed foreign visit is being undertaken by a person in his/her personal capacity
and the entire expenditure thereon is being met by the person concerned?
Ans. No.
Q.4 How one can seek permission of the Government for receiving foreign
hospitality?
Ans. The applicant should submit application in Form FC-2 online.
Q.5 What documents are to be uploaded with FC-2 form for seeking prior
permission for Foreign Hospitality?
Ans. Following documents are to be uploaded with FC-2 form (as mentioned under Rule
7 of FCRR, 2011):-
• (i) Signature of the applicant (maximum 50 KB allowed in JPG/ JPEG format)
• (ii) An invitation letter from the host or the host country, as the case may be (maximum
1 MB allowed in PDF format)
• (iii) administrative clearance of the Ministry or department concerned in case of visits
sponsored by a Ministry or department of the Government (maximum 1 MB allowed in
PDF format).
•
Q.6 When should the application for filing the FC-2 form be filled?
Ans. The application for grant of permission to accept foreign hospitality should be filed
online ordinarily two weeks before the proposed date of onward journey.
In case of emergent medical aid needed on account of sudden illness during a visit abroad,
the acceptance of foreign hospitality shall be required to be intimated to the Central
Government within sixty days of such receipt giving full details including the source,
approximate value in Indian Rupees, and the purpose for which and the manner in which
it was utilized.
Provided that no such intimation is required if the value of such hospitality in emergent
medical aid is up to one lakh rupees or equivalent thereto.
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