The FCRA was enacted with the primary purpose of regulating the inflow of foreign contributions and ensuring that the received foreign contributions are not utilized for illegal purposes. All charitable organizations in India receiving foreign contributions come under the purview of this Act. Over the last few years, the Home Ministry has been scrutinizing the flow of foreign funds to all charitable organizations in India and the Ministry has also cancelled the licenses of over 8000 charitable organizations due to non-compliance with the reporting requirements stipulated under the Act.
Object of the Act
Foreign Contribution and Regulation Act 2010 (FCRA) is enacted with the following objects:
> Foreign Contribution
As defined in Section 2(1)(h) of FCRA, 2010, “foreign contribution” means the donation, delivery or transfer made by any foreign source ─
Exemption: An article given to a person (includes Individual, HUF, Company, Association) as a gift for his personal use and the market value of such article in India, on the date of such gift is not exceeding Rs. 25,000/-.
A donation, delivery or transfer or any article, currency or foreign security by any person who has received it form any foreign source, either directly or through one or more persons, shall also be deemed to be foreign contribution with the meaning of this clause.
The interest accrued on the foreign contribution deposited in any bank or any other income derived from the foreign contribution or interest thereon shall also be deemed to be foreign contribution within the meaning of this clause.
Any amount received 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.
> Who can receive foreign contribution?
> Can Private Companies receive foreign contribution?
Yes. Any Private Company can receive foreign contribution if they wish to do charitable work at some point of time subject to following conditions:-
> Who cannot receive foreign contribution?
As defined in Section 3(1) of FCRA, 2010, the following are prohibited to receive foreign contribution:
An organization with less than 3 years of existence 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:
> 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:
The ‘person’ making an application for registration or grant of prior permission-
The acceptance of foreign contribution by the association/ person is not likely to affect prejudicially –
The acceptance of foreign contribution shall not lead to incitement of an offence and shall not endanger the life or physical safety of any person.
Separate Bank Account for receiving Foreign Contribution
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 association. However, one or more accounts (called Utilization Account) in one or more banks may be opened by the association for utilizing 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-6 is to be given online within 15 days of opening of such account.
Application for grant of registration / prior permission is to be submitted online in form FC-3 at the website fcraonline.nic.in.
For Prior Permission
Validity & renewal
Registration shall be valid for a period of 5 years and thereafter application for renewal of registration may be made before 6 months from the expiry of their existing registration.
> Donation by NRI
Contributions made by a citizen of India living in another country (Non-Resident Indian), from his personal savings, through the normal banking channels are not treated as foreign contribution.
> Foreign remittances from relative
Foreign remittances from relatives are not treated as foreign contribution. However, any person receiving foreign contribution in excess of Rs. 1 lakh or equivalent thereto in a financial year from any of his relatives shall inform the Central Government in Form FC-1 within 30 days from the date of receipt of such contribution.
> Govt. Department
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.
An association permitted to accept foreign contribution is required to maintain separate set of accounts and records exclusively for the foreign contribution received and submit an annual return, duly certified by a CA, giving details of the receipt and purpose-wise utilization of the foreign contribution. Annual returns of association are required to be filed in form FC-4 accompanied with scanned copies of income and expenditure statement, balance sheet and statement of receipt and payment, online at fcraonlineservice.nic.in within a period of 9 months from the closure of the year i.e. by 31st December each year.
Submission of a ‘NIL’ return, even if there is no receipt/utilization of foreign contribution during the year, is mandatory. However, in such case, certificate from Chartered Accountant, audited statement of accounts is not required to be uploaded.
An association not filing annual return on time may face penalty for of late submission of return and even cancellation of registration.
Mapping of various e-forms required to be filled under FCRA, 2010
|FC-2||Application for seeking prior permission to accept foreign Hospitality;|
|FC-5||Application for seeking permission for transfer of foreign contribution to other unregistered person;|
Any query or suggestion may be forwarded to firstname.lastname@example.org
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