Foreign Contribution Regulation Act, 2010

9 November 2024

2,466 8 minutes read

Here is everything you need to know about FCRA Registration, eligibility and application procedure. Read the blog to know more.

Table of Contents

The Foreign Contribution Regulation Act (FCRA) of 2010 is a crucial regulation for non-profit organizations in India, enabling them to receive foreign contributions while ensuring transparency and legal compliance. This blog provides an in-depth understanding of the FCRA registration process including details on FCRA online procedures, its requirements, FCRA 2020 Amendments, and key updates from the FCRA Rules 2022.

What is the Foreign Contribution Regulation Act (FCRA)?

The FCRA Act 2010 regulates foreign donations to ensure that such contributions are not used for activities detrimental to the national interest. It mandates that organizations seeking to accept foreign contributions must obtain FCRA registration. This law primarily applies to NGOs, charities, and organizations working in sectors such as education, healthcare, and social services. The FCRA Act also includes specific provisions for monitoring foreign contributions and maintaining national security.

Concept & Definition of FCRA

The FCRA defines foreign contributions as any donation, delivery, or transfer made by a foreign source to an organization or individual in India. Understanding the FCRA compliance framework is essential for maintaining the integrity of these transactions.

Why is FCRA Registration Required?

Having an FCRA license legitimizes the organization’s ability to receive foreign contributions, ensuring compliance and fostering trust. Organizations that plan to accept foreign contributions must adhere to FCRA regulations to avoid penalties. Non-compliance can lead to legal consequences, such as suspension or cancellation of FCRA registration, fines, and even criminal charges. This is why FCRA registration is essential for NGOs to operate legally and transparently.

FCRA Registration Number Search

Once an organization is registered under FCRA, they are assigned an FCRA number. This number can be used to verify the registration status of NGOs and is important for transparency. Organizations or donors can perform an FCRA Registration number search to ensure compliance and legitimacy.

Eligibility Criteria for FCRA Registration

To register under Foreign Contribution Regulation Act (FCRA), an organization must meet the following requirements:

Registration Type: Must be a Section 8 company, trust, or society.
Operational History: Should have been active for at least 3 years and must have spent at least ₹10 lakhs on its core activities, excluding administrative expenditures.
Impact Evidence: Must provide evidence of significant impact and achievements in its field of work.
Financial Statements: Audited financial statements for the last three years must be submitted with the application.

FCRA Exemptions

Certain entities may qualify for FCRA exemptions, particularly if they are involved in activities related to national security, government projects, or in cases where specific legal allowances are made. Understanding FCRA exemptions is critical to determining whether an organization needs to seek registration or prior permission.

FCRA 2020 Amendments

The FCRA 2020 Amendment introduced several key changes aimed at enhancing transparency and accountability. These include:

Public Servants Restriction: Public servants are prohibited from receiving foreign contributions.
Administrative Expenses Limit: The limit on using foreign contributions for administrative purposes was reduced from 50% to 20%.
Transfer of Contributions Prohibited: NGOs can no longer transfer foreign contributions to other entities.
Mandatory SBI Account: All foreign contributions must be received through a designated branch of State Bank of India (SBI) in New Delhi.

How to Apply for FCRA Registration

Applying for FCRA registration involves a few simple steps:

Step-by-Step Guide:

Visit the FCRA website: Access the official website for the registration process.
Choose the Correct Form: Select Form FC-3A for regular registration or FC-3B for prior permission.
Fill in the Required Details: Enter your organization’s information, including governance, financials, and past activities.
Submit Documents: Upload governing documents like the Memorandum of Association, audited financial statements, and bank details.
Payment: Complete the application with online payment for processing fees.
Approval: Upon successful submission, your organization will receive an FCRA registration certificate, valid for 5 years.

For newly formed organizations that haven’t met the 3-year criterion, they can apply for FCRA Prior Permission to receive foreign funds for a specific project from a specific donor.

FCRA Registration Online Form Filing Steps

The FCRA portal provides various FCRA online services, including tracking FCRA application status, managing FCRA account details, and submitting compliance documents. To facilitate a smooth registration process, follow these online filing steps:

Step 1: Visit the FCRA Official Website

Open your browser and go to the official FCRA online portal: https://fcraonline.nic.in.

Step 2: Login to Your FCRA Account

Click on the “Login” option located in the top-right corner of the homepage.
Enter your Username and Password (created during your FCRA online registration).
Enter the Captcha code and click the “Login” button.

Step 3: Navigate to the FCRA Services

Once logged in, you’ll be directed to the dashboard.
Under the “Services” section, click on “FCRA Registration.”

Step 4: Select Form FC-3A

A list of forms will be displayed. Choose “Form FC-3A: Application for Registration under section 11(1) of the FCRA, 2010.”

Step 5: Read Instructions

Before proceeding, read through the instructions and guidelines provided on the form.
After reading, check the box confirming that you’ve understood the instructions and click “Proceed.”

Step 6: Fill in Applicant Organization’s Details

Name of the Association: Enter the full legal name of your organization.
Address of the Association: Fill in the complete registered address of the association, including the state and pin code.
Registration Number and Date: Provide the association’s registration number and registration date (as per your incorporation).
Nature of the Association: Select the appropriate category that best describes your organization (e.g., Charitable, Religious, Educational, etc.).

Step 7: Bank Account Details

Designated Bank Account for Foreign Contributions: Enter the details of the bank account designated to receive foreign contributions (as mandated by FCRA law).
Include:
- Account Number
- Bank Name
- Branch
- IFSC Code
- SWIFT Code (if applicable)

Step 8: Provide Chief Functionary Details

Enter details of the Chief Functionary (Head of the organization) including:
- Full Name
- Designation
- Date of Birth
- Address
- Email ID
- Mobile Number
Ensure that the details match exactly with the documents you will upload.

Step 9: Enter Executive Committee Details

Add the names and details of the Executive Committee/Board Members.
For each member, provide:
- Name
- Designation
- Nationality
- Aadhaar Number (for Indian nationals) or Passport Number (for foreign nationals)
- Address
Ensure that all committee members’ details are accurate and up to date.

Step 10: Fill in Purpose and Activity Information

Purpose of the Association: Briefly describe the main activities and objectives of the organization.
Proposed use of Foreign Contributions: Clearly mention the intended use of any foreign contributions (e.g., for educational, health, welfare, etc.).

Step 11: Upload Supporting Documents

Upload scanned copies of the necessary documents in PDF format:
- Registration Certificate of the Association
- Memorandum of Association (MoA)/Articles of Association (AoA)
- Audited Financial Statements (for the last three financial years)
- Annual Report (describing activities of the last three years)
- Bank Account Certificate (from the bank where the FCRA account is opened)
- Resolution from the Board/Committee for FCRA Registration

Step 12: Check the Form for Completeness

Once all fields are filled and documents are uploaded, review the entire form carefully.
Use the Preview option to verify all the information before submission.

Step 13: Declaration

Tick the declaration box confirming that all information provided is true and accurate.
The Chief Functionary must digitally sign this section.

Step 14: Save and Continue

Click the “Save” button to store the information.
If satisfied with the form, click “Next” to continue.

Step 15: Complete Payment Information

Select the appropriate fee category based on your organization’s turnover or contributions.
- As of the latest update, the FCRA registration fee is Rs. 10,000.
Proceed to the payment page and select the online payment option (Net Banking, Credit/Debit Card, etc.).

Step 16: Payment Gateway

You will be redirected to a payment gateway.
Enter the necessary card or net banking details and make the payment.
Upon successful payment, a confirmation receipt will be generated.

Step 17: Generate Form and Final Submission

After completing the payment, a PDF of your completed FC-3A form will be generated.
Review the PDF and ensure everything is correct.

Step 18: Submission Confirmation

Once satisfied, click on Submit.
You will receive a confirmation message that your application has been successfully submitted.

Step 19: Download and Print

Download and print a copy of the acknowledgment receipt for your records.
The acknowledgment will also be sent to your registered email.

Step 20: Track Your FCRA Application Status

You can track the FCRA Registration application status by logging into the FCRA portal.
Navigate to “Track Application Status” and enter your application reference number.

FCRA Rules and FCRA Guidelines

The FCRA Rules outline comprehensive FCRA guidelines for how organizations can receive, utilize, and manage foreign contributions. Key points include:

Use of Funds: Organizations must use foreign contributions only for the purpose specified at the time of application.
Record-Keeping: Strict records of all foreign contributions received and utilized must be maintained, including books of FCRA accounts and the method of accounting.
Annual and Quarterly Returns: NGOs must file FCRA Annual Returns and FCRA Quarterly Returns to the Ministry of Home Affairs, providing a detailed account of the funds received and expenditures incurred.

These rules are designed to promote accountability and ensure that foreign funds are not misused.

Recent Amendments to FCRA

The FCRA has seen several amendments aimed at tightening regulations and enhancing FCRA compliance. Some notable amendments include:

Restriction on Funding: Amendments have imposed stricter conditions on who can donate to NGOs, limiting foreign funding sources.
Mandatory Bank Account: Organizations are required to maintain a designated bank account for foreign contributions, enhancing traceability.
Administrative Cost Cap: There are caps on the amount that can be spent on administrative expenditures from foreign contributions, ensuring that funds are primarily directed toward charitable activities.

These amendments reflect the government’s commitment to safeguarding national interests while allowing NGOs to operate effectively.

FCRA Renewal and Compliance

Maintaining FCRA registration is not a one-time process. Organizations must ensure that their registration remains valid and compliant with all regulations. This involves:

FCRA Renewal: Registered organizations must renew their FCRA registration by using the form (FC-3C) every five years. The process for FCRA renewal requires submitting necessary documents and maintaining compliance with updated regulations.
Intimation of Changes: NGOs must inform the Ministry of Home Affairs of any changes, including:
- Change in Name/Address
- Change in FCRA Designated Bank Account
- Opening of FCRA Utilisation Account
- Change in Board Members

Benefits of FCRA Registration

Organizations that register under FCRA gain several advantages, including:

Legal Compliance: Enables lawful acceptance of foreign contributions.
Global Outreach: Access to international funding sources and partnerships.
Increased Credibility: FCRA registration builds trust among both domestic and international donors.
Transparency: It mandates clear financial records, promoting accountability.
Efficient Fund Management: Registered organizations can easily manage foreign contributions for charitable activities.

Penalties for Non-Compliance with FCRA

Failure to comply with FCRA regulations can result in serious consequences:

Fines: NGOs that violate the law may face heavy fines or penalties imposed by the Ministry of Home Affairs.
Suspension of Funding: Organizations that fail to renew registration or comply with regulations may face suspension of their FCRA registration.
Cancellation of FCRA Registration: In cases of severe violations, NGOs may face cancellation of their FCRA registration, prohibiting them from accepting foreign contributions.
Seizure of Funds: The government can confiscate funds if there’s any contravention of FCRA provisions.
Criminal Penalties: In extreme cases, further legal action may be taken, including imprisonment.

Recent Changes in FCRA

The FCRA 2010 has undergone several amendments to tighten regulations and ensure more robust compliance. Some of the recent changes include:

Stricter norms for opening bank accounts designated for foreign contributions.
Requirement to use only one designated bank account for receiving foreign donations.
Limitation on administrative expenses, ensuring more funds are directed toward the organization’s core activities.

Conclusion

FCRA registration is essential for any organization in India that wants to receive foreign donations. FCRA law ensures legal compliance, promotes transparency, and enhances the credibility of NGOs, enabling them to expand their reach globally. By adhering to the FCRA guidelines, staying up-to-date with changes such as FCRA 2020 amendments, and ensuring compliance through FCRA annual returns, organizations can avoid penalties and make the most of international funding opportunities.

FAQs on Foreign Contribution Regulation Act 2010

What is FCRA Full Form?

The FCRA full form is Foreign Contribution Regulation Act. It regulates the acceptance and utilisation of foreign contributions by organisations to ensure that such contributions do not adversely affect national interest.

Can a trust accept foreign donations without FCRA registration?

Yes, a trust can seek FCRA prior permission from the central government for specific projects before receiving foreign funds.

What are the consequences of not renewing FCRA registration?

Failure to renew FCRA registration on time can lead to suspension of foreign funding and disrupt ongoing projects.

Which ministry regulates FCRA?

The Ministry of Home Affairs is responsible for regulating the Foreign Contribution Regulation Act.

How can I search for my FCRA number?

You can perform an FCRA number search by visiting the official FCRA website to verify your registration status.

What is the difference between FCRA Registration and FCRA Prior Permission?

FCRA Registration allows an organization to receive foreign contributions regularly, while FCRA Prior Permission is granted to newly formed organizations to accept foreign donations for a specific project from a specific donor.

What are the documents required for FCRA Registration?

Key documents include incorporation certificates, Memorandum of Association, audited financial statements of the last three years, and details of key functionaries.

Can FCRA registration be cancelled?

Yes, FCRA registration can be cancelled by the Ministry of Home Affairs if the organization is found to be in violation of FCRA rules or if the foreign contributions are being misused.

Is FCRA applicable to individuals?

No, FCRA is not applicable to individuals. It applies to associations, trusts, societies, and Section 8 companies that receive foreign contributions for specific charitable purposes.

What is the penalty for non-submission of FCRA Annual Returns?

If an organization fails to submit FCRA Annual Returns on time, it can face monetary fines, suspension of registration, and even legal action.

How can I check the status of my FCRA Registration or renewal?

You can check the FCRA registration status or renewal status on the official FCRA portal by entering your registration or application number in the search bar.

What is the impact of the FCRA 2020 Amendment on NGOs?

The FCRA 2020 Amendment introduced stricter rules, including lowering the limit on administrative expenses and mandating the use of a designated bank account at SBI, New Delhi, for receiving foreign contributions .

What happens if my FCRA Registration is suspended?

If your FCRA registration is suspended, your organization cannot receive foreign contributions for a maximum period of 360 days .

What is the procedure for renewing FCRA registration?

You need to apply for FCRA renewal 6 months before the expiry of your registration .

Can I transfer foreign contributions to another NGO?

No, as per the FCRA 2020 Amendment, NGOs are prohibited from transferring foreign contributions to other organizations .

What is the time limit for reporting the opening of an FCRA utilization account?

As per FCRA Rules 2022, organizations must now report the opening of any additional FCRA utilization accounts within 45 days, instead of the earlier 15-day period .