Expert Assistance

The Foreign Contribution (Regulation) Act (FCRA) governs the acceptance and utilization of foreign contributions by individuals, associations, and companies in India. Its main objective is to ensure that foreign contributions are not used to undermine national interest. Organizations intending to receive foreign funds must obtain FCRA registration or prior permission from the Ministry of Home Affairs (MHA).

The purpose of FCRA is to:

• Ensure that foreign donations do not compromise national interests.

• Promote transparency in the use of foreign funds for charitable and social causes.

 

Eligibility for FCRA Registration

To be eligible for FCRA registration, an organization must generally meet the following criteria:

1. Legal Structure: Be registered as one of the following:

   • A society under the Societies Registration Act, 1860.

   • A trust under the Indian Trusts Act, 1882.

   • A Section 8 company under the Companies Act, 2013.

2. Existence and Activity:

   • Be in existence for at least three years.

   • Have undertaken reasonable activity in its chosen field for the benefit of society, for which the foreign contribution is proposed.

3. Financial Standing:

   • Have spent at least ₹15 Lakh (this amount can sometimes be ₹10 Lakh as per older guidelines, so it's best to verify the current requirement) over the last three financial years on its core activities, excluding administrative expenses. This needs to be substantiated by audited financial statements.

4. FCRA Bank Account: Must have an FCRA designated bank account with the State Bank of India, Main Branch, New Delhi.

5. Other Eligibility Conditions:

   • The organization, its directors, office bearers, or key functionaries must not have been prosecuted or convicted for activities promoting sedition, violence, or communal disharmony.

   • The acceptance of foreign contributions should not affect India's sovereignty, security, public interest, or friendly relations with any foreign state.

   • The organization should have a DARPAN ID, which is obtained by registering on the NITI Aayog portal.

   • Key functionaries must possess an Aadhaar card (for Indian citizens). Foreigners require a passport or OCI card.

   • The organization should generally have a 12A registration certificate and a registration certificate (e.g., trust deed, society registration).

Note: In certain exceptional cases, the Central Government may waive the expenditure limitation of ₹15 Lakh. Organizations in the formative stage can apply for 'Prior Permission' to receive foreign donations from a specific donor for a specific project.

 

Registration Procedure for FCRA

The application for FCRA registration is an online process through the FCRA portal of the Ministry of Home Affairs (https://fcraonline.nic.in/). Here's a step-by-step guide:

1. Access the FCRA Online Portal: Go to the official FCRA online portal.

2. Sign Up: If you are a new applicant, you need to sign up to create a user ID and password.

3. Login: Use your created credentials to log in to the FCRA portal.

4. Select FCRA Registration: After logging in, choose the option for 'FCRA Registration'.

5. Fill Form FC-3A: Click on the link to apply online and then proceed to fill out Form FC-3A, which is the application form for FCRA registration. You will need to provide various details about your organization, its objectives, activities, executive committee members, and bank accounts.

6. Upload Documents: You will need to upload scanned copies of several mandatory documents in PDF format, including:

   • Registration Certificate of the Association.

   • Memorandum of Association/Trust Deed.

   • Activity Report for the last three years.

   • Audited Statements of Accounts for the last three years (Income & Expenditure, Balance Sheet, Receipts & Payments).

   • Affidavit of each key functionary.

   • Signature of the Chief Functionary and Seal of the Association (in JPG format with specified dimensions).

   • DARPAN ID.

   • PAN of the organization.

   • Aadhaar cards of key functionaries (or Passport/OCI for foreigners).

   • Registration certificate under relevant Acts (12A, etc.).

7. Provide Bank Details: Enter the details of your FCRA designated bank account at the SBI, Main Branch, New Delhi, along with the option to provide details for another FCRA account and a utilization account in any PFMS-compliant scheduled bank.

8. Final Submission and Payment: After filling in all details and uploading documents, you will need to enter the place and date and then click on the final submission button. You will then be directed to make the online payment of the prescribed fee (currently ₹10,000).

9. Print Application: After successful payment and submission, print a copy of the application for your records.

 

Post-Registration Compliance

Once FCRA registration is granted (valid for five years), the organization must comply with various regulations, including:

• Filing annual returns in Form FC-4 detailing the receipt and utilization of foreign contributions.

• Maintaining separate accounts for foreign contributions.

• Ensuring that the funds are used only for the stated purposes.

• Informing the MHA about any changes in key functionaries, addresses, or bank details.

• Applying for renewal of the FCRA registration six months before the expiry of the current certificate in Form FC-3C.

 

FCRA Compliance Requirements

Once registered, the NGO must:

• File annual return (Form FC-4) by 31st December of the following financial year

• Maintain separate FCRA books of accounts

• Submit quarterly reports of foreign contributions

• Use funds strictly for declared objectives only

Penalties for Non-Compliance

• Cancellation or suspension of registration

• Heavy fines

• Freezing of bank accounts

• Legal action by MHA

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Tip: Key Best Practices

• Always use the SBI FCRA account for receiving foreign funds

• Keep accurate and auditable financial records

• Update any changes (address, board members, objectives) on the FCRA portal

• Avoid political or religious misuse of foreign contributions