Getting funds from foreign entities for your non-profit venture requires certificate under FCRA from the Government. Contact Filecrat to get yours now!
Acceptance and utilization of every kind of contribution received from foreign entities are regulated by the Ministry of Home Affairs (MHA) as per the Foreign Contribution (Regulation) Amendment Act, 2020 (hereinafter FCRA). The law prohibits the recipient Indian individuals, charitable trusts, societies, companies, and other organizations from receiving funds for any activity which is against national and social interest. The Government has earlier cancelled thousands of charitable organizations licenses for non-compliance.
One of the significant amendments is revised conditions for FCRA registration. As per the latest regulations for FCRA Registration, the institution seeking FCRA registration should be in existence for three years and must have spent a minimum number of Rupees fifteen lakhs on its core activities for the benefit of society during the last three financial years.
It has been provided that if an application for renewal of FCRA registration is not received or not accompanied by requisite fees before the expiry of the validity of the certificate of registration, the validity of the certificate of registration shall be deemed to have ceased from the date of completion of the period of five years from the date of the grant of certificate of registration. In such cases, the amount of foreign contribution lying unutilized in the FCRA Account shall vest with the prescribed authority.
Types of FCRA Registration
- Proper registration through Form FC-3A
- Prior permission through Form FC-3B
Required Eligibility for an Association to receive Foreign Contribution
- FCRA Registration/ prior permission from central government
- It must be for a purpose of cultural, educational, religious and other social benefits.
- It should not be under prohibited category mentioned under FCRA which includes:
- Candidate for election
- Correspondent, columnist, cartoonist, editor, owner of a company or printer and publisher of a registered newspaper.
- Public servant, Judge, government servant or employee of any Corporation or any other body controlled on owned by the Government.
- Member of any Legislature
- Political party or its office-bearer
- Organisation of a political nature
- Association or company engaged in the production or broadcast of audio news or audio-visual news or current affairs Programme through any electronic mode.
- Individuals or associations who have been prohibited from receiving foreign contribution.
Authorized Receivers of Foreign Contribution
- Hindu Undivided Family
- Company registered under Section 8 of Companies Act, 2013
Registration under FCRA is subjected to following criteria:
The certificate of FCRA Registration is issued by the government authority and it is mandatory to obtain the FCRA registration certificate before acquiring or receiving any foreign contribution grants by any registered trust, social institutions, and NGOs.
- An association with minimum three years of existence
- An association must have spent a minimum amount of rupees fifteen lakhs on its core activities for the benefit of society during the last three financial years.
- An organisation registered under any of the following legislations:
- Charitable and Religious Trusts Act,1920
- Indian Trusts Act, 1882
- Indian Societies Registration Act, 1860
Conditions for Both Registration and Prior Permission
Registration and prior permission both are subjected to following criteria:
- The person making an application for registration, has undertaken reasonable activity in its chosen field for the benefit of the society for which the foreign contribution is proposed to be utilized.
- The person making an application for giving prior permission, has prepared a reasonable project for the benefit of the society for which the foreign contribution is proposed to be utilized.
- In case 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 pending against him
- In case 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.
- The acceptance of foreign contribution by the person referred to in point A is not likely to affect prejudicially either of the following:
- Sovereignty and integrity of India
- Security, strategic, scientific or economic interest of the State
- Public interest
- Freedom or fairness of election to any Legislature
- Friendly relation with any foreign State
- Harmony between religious, racial, social, linguistic, regional groups, castes or communities
- The acceptance of foreign contribution, —
- shall not lead to incitement of an offence;
- shall not endanger the life or physical safety of any person.
- The person making an application for registration or grant of prior permission:
- Is not fictitious or benami
- 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
- Has not been prosecuted or convicted for creating communal tension or disharmony in any specified district or any other part of the country
- Has not been found guilty of diversion or mis-utilization of its funds
- Is not engaged or likely to engage in propagation of sedition or advocate violent methods to achieve its ends
- Is not likely to use the foreign contribution for personal gains or divert it for undesirable purposes
- Has not contravened any of the provisions of this Act
- Has not been prohibited from accepting foreign contribution
Exemption from Registration/ Prior Permission
- Donation from personal savings of an NRI (Non-Resident Indian) through normal banking channels
- Donation received by any Indian government department.
- Foreign remittances from relatives amounting less than one lakh in a financial year.
Note: Any remittance of more than one lakh is required to inform the Central government through Form FC-1 within 30 days of the date of receipt.
Payment of fee
The fee is to be paid while filling online form through payment gateway. No Bank draft/cheque is accepted.
- For registration, the association is required to pay a fee of Rs. 10,000/-
- For prior permission, the fee is Rs. 5,000/- and for renewal, the fee is Rs 5000/- only.
Voluntary surrender of FCRA Registration
An association may surrender the certificate of registration for its own reasons through the application form FC-7 by uploading it on the web portal. Government will only permit such surrender of registration only after satisfying from the inquiry being made that such association has not contravened any of the provisions of this Act and the management of foreign contribution and asset, if any, created out of such contribution has been vested in the authority.
Assets derived from foreign contributions may be required to be vested in the relevant government authority if the FCRA registration is revoked.
- Consultation with our Experts
- Drafting of Application form
- Filing of final form
- Reply to one clarification from authorities
- Obtaining Certificate
- Self-attested copy of registration certificate of association
- Memorandum of association (MoA)/ Trust Deed
- Affidavit of each key functionary
- Signature of chief functionary (JPG/ JPEG format)
- Seal of the Association (JPG/ JPEG format)
- Aadhar Number of all the office bearers, directors, and other key functionaries of an NGO.
- Darpan ID of an NGO.
For the purpose of registration:
Copies of relevant audited statement of accounts for the past three years (Assets and Liabilities, Receipts and Payment, Income and Expenditure) clearly reflecting expenditure incurred on aims and objects of the association and on administrative expenditure;
For the purpose of Prior Permission:
- Duly signed Commitment Letter from donor organization and agreement stating the amount and purpose of donation.
- 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.
- Project Report for which Foreign Contribution will be received.
Yes, it is important to open the exclusive ‘FCRA account’ in State Bank of India, 11, Sansad marg, Main branch, New Delhi-110001, for receipt of foreign contribution. This account is mandatory for registration, for obtaining prior permission for receiving foreign contributions, or for renewal of registration under the FCRA
Yes, it is mandatory after registration and prior approval to file Annual Returns through Form FC-4 accompanied along with scanned copies of Audited Statement of Accounts containing (Income and Expenditure Statement, and Balance Sheet), Declaration certificate from Chief Functionary relating correctness and completeness of the information provided in the annual return and duly signed Chartered Accountant Certificate within 9 months from the last day of a financial year (December 31).
It is accepted only by online mode through form FC-4.
Yes, there is a restriction on transfer of foreign contributions to any other person whether or not the transferee is registered under the FCRA and granted a certificate or has obtained prior permission by central government.
Every person, who is registered and granted a certificate or given prior permission under this Act and receives any foreign contribution:
- Shall utilize such contribution for the purposes for which the contribution has been received
- Shall not defray as far as possible such sum, not exceeding 20 % of such contribution, received in a financial year, to meet administrative expenses.
The Act has reduced the limit for defraying administrative expenses from existing "50%” to "20%."
Yes, the interest or any other income earned would be considered as foreign contribution and such interest should be shown in the Annual Return (Form FC-4) during the year in which it is earned.
There is no rectification allowed after the final submission of online forms but in case of any error support center or help desk of FCRA can be contacted.
Associations which desire to renew their registration certificate shall apply online only in Form FC-3C within 6 months of the expiry of their existing registration certificate. After successful payment of fees only, the application is deemed to have been completed.
The existing registration under FCRA, 2010, will cease from the date of expiry of the period of five years from the date of grant of registration and organization will not be eligible to receive & utilize foreign contribution. In such a case, the association has to apply afresh for grant of registration.
For all FCRA services provided through online portal, Aadhar Number & Darpan ID are mandatory now. It has made compulsory for all trustees to register their Aadhaar card with the FCRA account. It is mandatory for all the office bearers, directors, and other key functionaries of an NGO.
No, Public servants are not allowed to receive foreign contribution. Now, public servants are also included in the ambit of persons who are banned from accepting any foreign funds/contribution.
Any organization who wants to surrender its FCRA registration due to its own reasons may do so, but any assets that have been created using foreign contribution will be transferred to an authority prescribed by the government.
The person or association shall be punishable with Fine of Rs. 100,000/- or 5% of the foreign contribution received during the period of non-maintenance of accounts, whichever is higher, for non-maintenance of account and records of foreign contribution received and manner of its utilization.
The person or association shall be punishable with Fine of Rs. 100,000/- or 5% of the foreign contribution received during the period of non-submission, whichever is higher, will be imposed and penalty stipulated under section 37 will get attracted i.e., Imprisonment for a term upto one year or fine or with both.
Central Government may cancel the certificate on being satisfied that the registered person has violated the provisions of section 14 of the FCRA, 2010 given under:
- the holder of the certificate has made a statement in, or in relation to, the application for the grant of registration or renewal thereof, which is incorrect or false; or
- the holder of the certificate has violated any of the terms and conditions of the certificate or renewal thereof; or
- in the opinion of the Central Government, it is necessary in the public interest to cancel the certificate; or
- the holder of certificate has violated any of the provisions of this Act or rules or order made thereunder; or
- if the holder of the certificate has not been engaged in any reasonable activity in its chosen field for the benefit of the society for two consecutive years or has become defunct.
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.
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