Introduction: The Foreign Contribution (Regulation) Act (FCRA) serves a crucial role in regulating foreign contributions to prevent activities detrimental to national interest. This overview delves into the act’s objectives, applicable rules, criteria for receiving foreign contributions, registration process, and guidelines for utilization and reporting.
Objective/ Purpose of FCRA:
To regulate the acceptance, utilization and prohibition of foreign contribution by certain individuals or associations or companies for any activities detrimental to national interest and for matters connected therewith or incidental thereto.
Act/ Rules Applicable:
Foreign Contribution (Regulation) Act, 2010 and the Foreign Contribution (Regulation) Rules, 2011 read with other notifications/orders issued time to time. All are available at the official website https://fcraonline.nic.in.
Foreign contribution meaning:
Donations, delivery, fee (Including fees from foreign student by an educational institution in India) or transfer of any article, currency or foreign security by any person who has received it from any foreign sources either directly or through one or more persons, shall also be deemed to be foreign contribution and;
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.
Foreign contribution excludes earnings from foreign clients in lieu of goods sold or services rendered, as this is a transaction of commercial nature in the normal course of business within or outside India. Donation from an Indian origin person who has acquired foreign citizenship is treated as foreign contribution. This will also apply to PIO / OCI cardholders. They are foreigners. However, this will not apply to ‘Non-resident Indians’, who still hold Indian citizenship as they are not foreigners.
Person can receive foreign contribution:
It must have a definite cultural, economic, educational, religious or social programme and obtained the FCRA registration/prior permission from the Central Government.
Eligibility criteria to get registration:
Registered under an existing statute like the Societies Registration Act, 1860 or the Indian Trusts Act, 1882 or Section 8 of Companies Act, 2013, existence for at least three years and has undertaken reasonable activity for the benefit of the society and minimum Rs15,00,000 (Excluding admin exps.) has spent during the last three years.
Process of Registration:
Application for registration is to be submitted online in form FC-3A on the website- https://fcraonline.nic.in.
Registration shall be granted with the validity of 5 years period and will be renewed subject to provisions of the act.
Documents required for getting Registration:
All FCRA services provided through online portal. Aadhar Number & Darpan ID is mandatory. All the documents (Scan) to be uploaded online while filing the form FC-3A.
a) Signature of the chief functionary, b) Self-certified copy of registration certificate of Society/ Trust/ Company c) Self-certified copy of relevant pages of MOA/ AOA showing aim and objects of the association (in English/ Hindi only) d) Activity Report indicating details of activities held during the last three years e) Copies of audited statement of accounts for the past three years f) Fee of Rs.10,000 is to be paid online g) Affidavit from each office bearer in Performa specified.
Executive Committee:
Organizations having foreign nationals, other than of Indian origin, as members of their executive committees or governing bodies are generally NOT permitted to receive foreign contribution. However, foreigners may be allowed to be associated with such associations in an ex-officio capacity, if they are representing multilateral bodies, foreign contribution from whom is exempted from the purview of the Foreign Contribution (Regulation) Act, 2010, or in a purely honorary capacity depending upon the person’s stature in his/her field of activity. Relaxation may be considered on case to case basis by competent authority subject to some conditions.
Acceptance of Grant:
FCRA registered NGOs shall have to open the FCRA designated Bank Account in SBI, Sansad Marg, Main branch, New Delhi ONLY for receiving the foreign contributions. FCRA is meant to ensure that foreign contribution is received from legitimate sources and utilised for legitimate purposes only and not from any banned organizations.
Utilisation of grants:
a) One or more accounts (Utilization Account) in scheduled banks may be opened after it has been received in the designated FCRA bank account (SBI), provided that no other fund than foreign contribution shall be received or deposited in such account and in all cases of any change, intimation in FC-6D is to be given online within 45 days of opening of such account.
b) No foreign contribution can be transferred by the recipient to any other NGOs.
c) Accounts and records relating to receiving and utilization of foreign contribution are to be maintained separately.
d) Administrative expense as per rule 5 of FCRR 2011, the administrative expense shall not exceed the 20% of the total FC receipts.
e) Foreign contributions must not be invested in Mutual Funds/ other speculative investments as defined in rule 4 of FCRR 2011.
f) Every asset purchased with foreign contribution should be acquired and possessed in the name of the association and not in the name of office bearers.
g) Annual returns are to be filed online by 31st December each year in FC-4 at https://fcraonline.nic.in
Changes in Name, Address, Objectives, FC Bank Account details:
Intimation for change in the name/address to be given online in form FC-6A, for change in aims and objects form FC-6B, for change in the utilization Bank account form FC-6C and for change of Members of the Executive Committee/Governing Council form FC-6E to be filed within 45 days and self-certified copy of amendment to be uploaded.
Renewal of registration:
Renewal of registration certificate shall apply online only in form FC-3C along with prescribed fees within 6 months before the expiry of their existing registration certificate.
Offences and Penalties:
| Sl.No | Offences | Penalties |
| 1 | Transferring any FC to any other person in contravention of section 7 of the Act. | 100,000/- or 10% of such transferred FC, higher of both. |
| 2 | FC spent more than 20% of the FC received for administrative expenses. | 100,000/- or 5% of such FC, higher of both. |
| 3 | Accepting FC without taking registration/ prior permission. | 100,000/- or 30% of such FC received, higher of both. |
| 4 | Receiving FC Bank account other than specified Bank account. | 100,000/- or 5% of such FC received, higher of both. |
| 5 | Receiving/ depositing fund other than FC in the Bank account opened for receiving/ utilizing FC. | 100,000/- or 2% of deposit, higher of both. |
| 6 | Non-furnishing the details (amount/ source/ manner) of FC received. | 100,000/- or 5% of such FC received during period, higher of both. |
| 7 | Non-maintaining the account/ records of FC received and manner of its utilization. | 100,000/- or 5% of such FC received during period, higher of both. |
| 8 | Failure to intimate about FC receipts within the prescribed time limit. | 5% of such FC received in a financial year. |
| 9 | Failure to intimate about opening of Bank account within the prescribed time. | 10,000/- per Bank account. |
NOTE: The amount of the penalty shall not be more than the value of the FC received.
Suspension/ Cancellation of Registration Certificate:
Any organization who wants to foreclose its FCRA registration to its own reasons may surrender the certificate by uploading application online in form FC-7 on the website https://fcraonline.nic.in. Central Government may suspend/ cancel the certificate as per the provisions of the act.
FCRA Forms:
| Sl No. | Forms | Form Purposes | Filed by |
| 1 | FC 1 | Intimation of receipt of foreign contribution | 15th day following Qtr |
| 2 | FC 3A | Application for FCRA Registration | Before receiving FC |
| 3 | FC 3B | Application for FCRA Prior Permission | Before receiving FC |
| 4 | FC 3C | Application for Renewal of FCRA Registration | 6 months before expiry |
| 5 | FC 4 | Annual Returns | 31st December |
| 6 | FC 6A | Change of name and/ or address | Within 45 days |
| 7 | FC 6B | Change of nature, aims and objects | Within 45 days |
| 8 | FC 6C | Change of designated/ Utilization bank account details | Within 45 days |
| 9 | FC 6D | Opening of additional FC-utilisation Bank Account | Within 45 days |
| 10 | FC 6E | Change in original Key members of the association | Within 45 days |
| 11 | FC 7 | Application for surrender of certificate of registration | Closer of FCRA |
Conclusion: Compliance with FCRA is essential for organizations accepting foreign contributions. From stringent eligibility criteria to precise documentation, adherence to rules is paramount. Stay informed about the application process, utilization norms, and reporting requirements to ensure lawful acceptance and utilization of foreign contributions, safeguarding both national interests and organizational objectives.
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