FCRA Full Form: What is FCRA, Requirement, Source etc.

FCRA Full Form: FCRA stands for Foreign Contribution Regulation Act, and FCRA 1976 is a law of the Government of India that regulates the receipt of foreign contributions or aid from outside India to Indian territories. This is essential to ensure that such assistance does not affect politics or any other situation in India. For genuine donation, the provision of law is not very difficult to comply with. Regular compliance is limited to the filing of annual returns every year. This law is enforced by the Ministry of Home Affairs, Government of India. The ministry has a separate section to ensure compliance with the Foreign Funding Registration.

In other words, Charitable Trusts, Societies, and Section 8 Companies that receive foreign contributions or donations from foreign sources must register under Section 6(1) of the Foreign Contribution Regulation Act, 2010. Such a registration under the Foreign Contribution Regulation Act 2010 is named an FCRA registration.

Latest Update: Indian Government extends the validity of NGOs FCRA registration Certificate till June 30

What is Foreign Contribution?

As defined in Section 2(1) (h) of FCRA, 2010, “foreign contribution” means the donation, delivery or transfer made by any foreign source ─

• Any article, not being an article given to a person* as a gift for his personal use, if the market value, in India, of such article, on the date of such gift is not more than such sum** as may be specified from time to time by the Central Government by rules made by it in this behalf.
• Any currency, whether Indian or foreign.
• Any security as defined in clause (h) of section 2 of the Securities Contracts(Regulation) Act, 1956, and includes any foreign security as defined in clause (o) of Section 2 of the Foreign Exchange Management Act, 1999.

In other words: A donation, delivery or transfer of any article, currency or foreign security referred to in this clause by any person who has received it from any foreign source, either directly or through one or more persons, shall also be deemed to be foreign contribution with the meaning of this clause.

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Foreign Source

Foreign source, as defined in Section 2(1) (j) of FCRA, 2010 includes:

• The Government of any foreign country or territory and any agency of such Government.
• Any international agency, not the United Nations or any of its specialized agencies, the World Bank, International Monetary Fund or such other agency as the Central Government, may, by notification, specify on this behalf.
• A foreign company.
• A corporation, not a foreign company, is incorporated in a foreign country or territory.
• A multi-national corporation is referred to in sub-clause (iv) of clause (g).
• A company within the meaning of the Companies Act, 1956, and more than one-half of the nominal value of its share capital is held, either singly or in the aggregate, by one or more of the following, namely:
  (A) the Government of a foreign country or territory.
  (B) the citizens of a foreign country or territory.
  (C) corporations incorporated in a foreign country or territory.
  (D) trusts, societies or other associations of individuals (whether included or not) formed or registered in a foreign country or territory.
  (E) Foreign company.
• A trade union in any foreign country or territory, whether or not registered in such foreign country or territory.
• A foreign trust or a foreign foundation, by whatever name called, or such trust or foundation mainly financed by a foreign country or territory.
• A society, club or other association or individuals formed or registered outside India;
• A citizen of a foreign country.

Registration and Prior Permission

Now the questions are started How does a person obtain permission to accept foreign contributions? So there are two modes of obtaining permission to receive foreign assistance, according to FCRA, 2010:

• Registration
• Prior Permission

FCRA for NGO: An NGO can receive funds from abroad if it has an FCRA certificate. To get an FCRA certificate, the NGO should be three years old.

Eligibility Criteria

This section will provide detailed information about FCRA Registration Eligibility criteria for FCRA registration or Prior Permission. In the present scenario, the world is more focused on social and environmental causes; apart from their common profit-making objective, businesses themselvesThectivities that promote social, economic, cultural, etc. In the present scenario, logical growth and prosperity. So check the details information one by one.

Eligibility criteria for grant of registration:

• For the grant of registration under FCRA, 2010, the association should be registered under an existing statute, just like the Societies Registration Act, 1860 or the Indian Trusts Act, 1882 or section 25 of the Companies Act, 1956 (Now Section8 of the Companies Act, 2013) etc.
• Normally be breathing for a minimum of three years and has undertaken reasonable activity in its chosen field for the advantage of the society that the foreign contribution is proposed to be utilized. The applicant NGO/association are liberal in selecting its expenditure items (excluding the executive cost as defined in Rule 5 of FCRR, 2011) to become eligible for the minimum threshold of Rs. 15.00 lac spent during the last three years.
• Suppose the association wants to include its capital investment in assets like land, buildings, other permanent structures, vehicles, equipment etc. In that case, the Chief Functionary shall give an undertaking that these assets shall be utilized just for the FCRA activities and that they won’t be diverted for another purpose till FCRA registration of the NGO holds.

NOTE: To check the complete FCRA Registration eligibility criteria, document required, registration procedure step-by-step guidance, Click Here

FCRA Requirements:

The FCRA has certain requirements that are designed to protect and uphold India’s interests. It guarantees the safeguarding of sovereign rights and upholds the integrity of legislative elections. In addition, it helps to maintain and strengthen relationships with other countries. Establishing and maintaining these connections is essential for promoting international cooperation and collaboration.

In addition, the FCRA requires the promotion of peace among different societal groups. Its goal is to reduce tensions and conflicts among different religious, social, regional, and linguistic communities. By doing so, it helps to maintain the overall balance and stability of the nation.

The FCRA is also essential in controlling the financial operations of non-governmental organizations. It enforces transparency and accountability measures to ensure the appropriate use of foreign contributions. This oversight is crucial in ensuring the proper use of funds and encouraging responsible behavior among organizations that receive foreign donations.

All things considered, the FCRA is a tool for protecting American interests, advancing diplomatic ties, and preserving domestic tranquility. This demonstrates the government’s dedication to ensuring that foreign contributions are used for the improvement of society and the nation as a whole.

Procedure for Applying FCRA Certificate Online:

• Go to the Official Site: Follow the link to the Ministry of Home Affairs’s webpage.
• Go to the section for FCRA online firms: On the page, look for the “FCRA online firms” link.
• Pick out the FCRA Registration Application (FC-3): Click on the “application for FCRA registration (FC-3)” link once you’re on the FCRA online companies page.
• Click to Apply Online: On the next screen, click on the link that says “click to apply online.”
• Make a New User Account: You’ll need to sign up to make an account if you’ve never used the site before. After clicking the “signup” button, you will be asked to enter your Darpan ID and specifics about the Chief Functionary.
• Write Down User ID: Once you’ve given the required information, don’t forget to write down your user ID for future use.
• Sign in with your information: To get into your account, use the login information you just made.
• Select FCRA Registration Application: You will see a screen where you need to choose “FCRA registration” under “I am applying for” after logging in. After that, click “Apply online.”
• Fill in needed Information: Fill out all the needed information and then move on with the application. This has information about partners, the executive committee, the EC, and the bank.
• Send in Application and Required Documents: Once you’ve filled out all the necessary information, apply along with the necessary documents.
• Make Online Payment: Once you’ve sent in your application, you’ll need to pay the fees online.
• Keep the Acknowledgment for Future Use: After you make the payment, keep the proof of payment for future use.

Amendment to the Foreign Contribution Regulation Act of 2022

In July 2022, the Ministry of Home Affairs (MHA) changed the Foreign Contribution Regulation Act (FCRA). These changes were very important. These changes raised the number of offences that can be committed more than once from 7 to 12. Certain changes were important, such as:

• Intimation Limit Increased: The MHA raised the limit from Rs 1 lakh to Rs 10 lakh for telling the government about payments from family members living abroad.
• Making it possible for more time to be given: The MHA gave groups more time to let the government know when they opened bank accounts.
• Removal of Rule 13’s Provision “b”: The MHA got rid of the need for groups to report on the government’s website every three months about any foreign funds they received, including information about the donors, the amount received, and the date the money was received.
• Balance Sheet Audit Every Year: Under the FCRA, businesses must now send in an inspected balance sheet every year. On the Ministry’s website or on their own website, they can do this.

The main goal of these reforms is to make the FCRA structure more open and easy to follow.

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Frequently Asked Questions (FAQs)

Who can receive foreign contributions?

A ‘person’, as defined in Section 2(1)(m) with the exclusion of those mentioned in Section 3 of FCRA, 2010, having a definite cultural, economic, educational, religious or social programme can receive foreign contribution after it obtains the prior permission of the Central Government, or gets itself registered with the Central Government. Illustrative but not exhaustive lists of activities that are permissible and may be carried out by associations of different natures are available on the website — http://mha.nic.in/fcra/

Is a donation given by an Indian origin and having foreign nationality treated as a ‘foreign contribution’?

Yes, A donation from an Indian who has acquired foreign citizenship is treated as a foreign contribution. This will also apply to PIO cardholders and Overseas Citizens of India. However, this will not apply to ‘Non-resident Indians’ who still hold Indian citizenship.

Can foreign contributions be received in rupees?

Yes, Any amount received from a ‘foreign source’ in rupees or foreign currency is construed as a ‘foreign contribution’ under law. Such transactions, even in rupee terms, are considered foreign contributions.