FCRA Registration

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FCRA Registration

All the Charitable trust, societies and Section 8 Company that receives foreign contribution or donation from foreign resources shall apply for FCRA Registration.

FCRA registration is done under the Foreign Contribution Regulation Act, 2010. FCRA stands for Foreign Contribution Regulation Act. The Foreign Contribution Regulation Act, 2010 was enacted with a view to:-

Balance the acceptance and utilization of foreign contribution or foreign hospitality by established individual associations or companies.
Bar on the acceptance and utilization of foreign hospitality or foreign contribution for any activities adverse to national interest and for matters related to therewith or incidental thereto.

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.

Who are Eligible for FCRA Registration?

The Below-mentioned entities are eligible for FCRA Registration:-
Section-8 companies registered under the Companies Act.
Trust registered under the Indian Trust Act
Societies registered under the Indian Society Registration Act
The entity must not be prohibited in any form by the provision of the FCRA.
Foreign contribution accepted by the trust shall not risk the life or safety of any individual or shall not resultin any offense.
The NPO for registration must have charitable objectives to serve the society by promoting health, education, economic development, promotion of art, culture, religion, sports, etc.

What Documents are required for FCRA Registration?

Below-mentioned documents are required for FCRA Registration:-
Self-attested copy of incorporation certificate, trust deed, or any other certificate hold by such entity
Particulars of Non-Profit Organization along with the PAN.
Copy of MOA & AOA of institutions,
Impression of the chief judiciary (It shall be in JPG From)
A detailed report on activities of the preceding 3 years.
Audited copy of financial statement, P&L account, Income-Expenditure details, and cash flow statement of the preceding 3 years.
Certified true copies of the resolution passed by a governing body authorized by Non- profit organization.
Certificate obtained under section 12 AB of Income Tax Act.

What are the Penalties for Violation of FCRA?

What are the Types of Registration Under FCRA 2010?

There two ways in which an applicant can obtain registration as per FCRA 2010, those are as follows:-

Normal Registration

The applicant must be registered under:-

The Societies Registration Act, 1860 or
The Indian Trusts Act, 1882 or
Incorporated under Section 8 Company as per the Companies Act, 2013 or any such Act as may be prescribed.

An applicant must have made appropriate contributions by endeavoring activities in its chosen field for the benefit of society.

Must have spent a minimum of Rs. 15 lakhs in the last 3 years towards achieving its objectives.

Submission of the financial statements of the last 3 years that are duly audited by qualified Chartered Accountants.

If an entity that is newly registered, likely to receive the foreign contributions, then approval can be made to the Ministry of Home Affairs via the Prior Permission (PP) method.

Prior Permission Registration

The Prior Permission Registration is preferably suited for those institutions that are newly registered and are likely to receive foreign contributions. Prior Permission is granted for receiving the specific amount from a specific donor for carrying out specific projects. The Non-profit organization must be registered:-

Under the Societies Registration Act, 1860 or,
The Indian Trusts Act, 1882 or,
Incorporated as Section 8 Company as per the Companies Act, 2013 or any such Act as may be required.

Submit a particular commitment letter from the contributor to the Ministry of Home Affairs which indicates (1) Amount of contribution given, and (2) Aim for which it is proposed to be given.

If in case, the Indian recipient organization and foreign donor organization have common members, the following conditions need to be met:-

The Chief Functionary of the Indian entity cannot be part of the contributor entity.
At least 51% of the members/office-bearers of the governing body of the Indian recipient entity should not be employees/members of the foreign contributor entity.
Where the foreign contributor is an individual: –

I- That individual cannot be the Chief Functionary of the Indian organization.

II- At least 51% of office bearers/members of the governing body of the recipient entity should not be the family members and close relatives of the donor.

Non-Eligible Entities for Applying FCRA Registration

Following entities are not allowed to be granted FCRA registration:-

The applicant is fictitious or Benami.
Applicant against whom prosecution is conducted for indulging in any unfair activity
An applicant who has been convicted or prosecuted for any communal tension made in any area of specified district or any part of the country
Entity has engaged in any violent activities
Has utilized foreign contribution for its personal use
Any entity de-bared for accepting any foreign receipt or foreign grant under any provision of law.
Any such acceptance of foreign grant that affects prejudicially:

The sovereignty of India
Public Interest
Relationship with any state.

Brief on Renewal of FCRA License

FCRA registration remains valid for five years, which can be renewed by applying for the renewal. An entity shall apply for renewal within the following timelines:

At least six months before the date when the license is getting lapsed.
At least 12 months before the date when registration lapses, in cases the entity is operating on a multi-year project.

Cancellation/Suspension of FCRA Registration

In case authorities are of the view that registered entity is not operating as per the provisions of law and its license needs to be cancelled, such authority can do so by giving the notice to the concerned entity. Following are the few reasons that can be considered while cancelling the license:

NGO fails to comply with the provisions of the Foreign Contribution (Regulation) Act.
If the entity fails to submit an annual return within the due date
In case any inquiry is made for any allegation imposed against such organization for any wrongdoing in operations, and such allegation proved to be true
Contribution received is not utilized for the attainment of the main object of entity neither for achieving the purpose stated during FCRA registration application

Frequently Asked Questions (FAQ’s)

What Documents are Required for Prior permission registration?

• Initials of Chief Functionary in JPG format.
• Certified copy of the Trust Deed or Registration Certificate of the Association.
• Duly signed a letter of commitment from Donor.

Can FCRA registration be renewed?

FCRA Registration certificate once granted remains valid for a period of 5 years. To keep the registration valid, an application for renewal of FCRA registration can be made 6 months prior to the date of expiry.

Whether donation given by an individual of Indian origin and having foreign nationality is treated as ‘foreign contribution’?

Yes. donation given by an individual of Indian origin and having foreign nationalityis treated as foreign contribution.

Can foreign contribution be received in rupees?

Yes, any donation received from ‘foreign source’ in Rupees or foreign currency is construed as ‘foreign contribution’ under law.

Whether income or any other income earned from foreign contribution be considered foreign contribution?

Yes, any income or any other income earned from foreign contribution be considered foreign contribution.

Can a foreign contribution be mixed with Local Receipts?

No, Foreign contribution cannot be utilized or mixed with the Local receipts.

Whether infusion of foreign share capital in a company registered under Section 8 of the Companies Act 2013, attracts the provision of FCRA,2010?

Yes, infusion of foreign share capital in a company registered under Section 8 of the Companies Act 2013,is treated as Foreign contribution.

What are the different types of FCRA Registration?

FCRA registration is categorized into the following two types:
• Proper FCRA registration
• Proper Permission for FCRA registration

What is the compliance required after FCRA Registration?

After the receipt of FCRA License, the entity must file an annual return in prescribed form FC-4 online through the official website of https://fcraonline.nic.in along with following documents certified by chartered Accountant shall be annexed with FC-4:

Scanned copy Income Statement
Scanned copy of Balance Sheet
Statement of the foreign receipt
Payments and expenditure incurred by an entity

What is the due date of filing an annual return by the FCRA registered entity?

FC-4 is the annual compliance filed within the end of 9 months from the end of the financial year, i.e., this shall be filed on or before the 31st day of December every year.

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