Introduction
The Foreign Contribution (Regulation) Act, 2010 (FCRA) regulates the receipt and utilization of foreign contributions by NGOs and associations in India. Understanding the FCRA dos and don’ts is crucial for organizations seeking foreign funding to ensure compliance and avoid penalties.
Dos and Don’ts
| Do | Don’t |
| Obtain DARPAN ID from Darpan portal of NITI AYOG | Approach Middlemen, government employees, CAs, or others claiming to be consultants regarding FCRA work. |
| Upload documents electronically online | Mix Foreign Contribution with Domestic Receipts. |
| Pay application Fee electronically online | Use ATM or Debit Cards for FC Bank Account. |
| Have a definite cultural, economic, educational, religious, or social programme. | Invest FC funds in Mutual Funds or Speculative Investments. |
| Open a dedicated FCRA Account in a designated bank branch | Mix books of accounts for FC and non-FC funds. |
| Maintain a separate set of accounts and records exclusively for foreign contribution | Transfer funds from FC Bank to Non-FC, even Direct Bank Transfer. |
| Place the audited statement of accounts electronically online on receipts and utilization of the foreign contribution | Encourage cash withdrawals; use “Account Payee” cheques. |
| Apply FCRA Renewal to the Central Government six months before the date of expiry of the certificate of registration. | Accept foreign contribution without prior permission or having a certificate of FCRA Registration. |
| Submit signed or digitally signed application electronically online on fcraonline.nic.in two weeks before the proposed date of onward journey (for accepting foreign hospitality) | Utilize foreign contribution for administrative purposes exceeding 20% of the total. |
| Intimate within thirty days from the date of receipt of foreign contribution in excess of Rs. 1 lakh from relatives. | Receive or utilize foreign contribution if the certificate of registration is ceased and not renewed. |
| File mandatory FC annual returns in electronic form | Avoid filing mandatory FC annual returns in electronic form. |
| Comply with all provisions of the FCRA, 2010 | Make false statements, declarations, or deliver false accounts. |
FAQs
Which organizations need to register under FCRA?
Any person residing in India, including individuals, associations, and companies, seeking to receive foreign contributions above a certain limit must register under FCRA.
What documents are required for FCRA registration?
The specific documents required may vary, but generally include your organization's constitution/memorandum, audited financial statements, details about your foreign funding sources, and a program plan outlining how foreign contributions will be used.
How long does the FCRA registration process take?
Processing times can vary, but typically take several weeks or months.
What activities can foreign contributions be used for?
Foreign contributions can be used for a variety of purposes aligned with cultural, economic, educational, religious, or social goals as outlined in your program plan.
Is there a limit on administrative expenses covered by foreign contributions?
Yes, generally administrative expenses cannot exceed 20% of the total foreign contribution received.
Can we accept foreign contributions in kind (goods or services) instead of money?
Yes, FCRA also covers foreign contributions in kind. However, the same registration and reporting requirements apply.
How do we report the receipt and utilization of foreign contributions?
Registered organizations must file annual returns electronically on the FCRA portal, detailing all foreign contributions received and how they were used.
What happens if we don't file our FCRA annual returns?
Failing to file FCRA returns can lead to penalties and potential cancellation of your FCRA registration.
