an initiative of FMSF & CPA




Should Business/Consultancy income be considered as a part of Foreign Contribution

The new Act excludes consultancy or commercial receipts from the purview of foreign Contribution. As per the new provisions, any fee or cost against business, trade or commerce shall not be considered as foreign contribution. In other words, such receipts can be treated as local income.

As per Sec2 (h) (iii) 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 of a foreign source towards such fee or cost shall be excluded from the definition of foreign contribution.