Donation receipt, 80G and FCRA reconciliation

Finin2min Summary — in 2 Minutes

Official source and legal ownership

What this covers

An organisation that is both FCRA-registered and approved under Income Tax Act Section 80G needs its donation-receipting process to correctly distinguish foreign contribution from domestic donations at the point of receipt - the same donation cannot be reported as both FCRA-covered foreign contribution and an ordinary domestic 80G-eligible donation without reconciling the two records.

How the reconciliation works

Foreign contributions feed into the FC-4 annual return; domestic donations from resident donors feed into the Form 10BD statement of donations underlying the donor's own 80G deduction claim (see the tax-company interface topics) - an organisation should reconcile its total receipts against both filings each year to confirm no donation has been double-counted, misclassified, or left out of either report.

Why it matters

Because a misclassified receipt can create inconsistencies between what the organisation reports to the Ministry of Home Affairs under FCRA and what it reports to the Income Tax Department under Section 80G, a reconciliation step comparing both records against the underlying bank statements is a practical safeguard against a discrepancy that either regulator could later flag.