FCRA stands for Foreign contribution regulation Act, and FCRA 1976 is a law of the government of India which regulates receipt of foreign contributions or aid from outside India to Indian territories. This is essential to ensure that such assistance does not affect political 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. There is a separate section in the ministry to ensure compliance with the Foreign Funding Registration.
In other words, Charitable Trusts, Societies, Section 8 Companies that receive foreign contributions or donations from foreign sources are required to get registration 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.
FCRA Full Form in Hindi: FCRA का फुल फॉर्म “Foreign Contribution Regulation Act” होता है, जिसे हिंदी भाषा में विदेशी अंशदान (विनियमन) अधिनियम कहा जाता है |
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, ─
- of 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;
- of any currency, whether Indian or foreign;
- of 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 or 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.
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 being 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 in this behalf;
- A foreign company;
- A corporation, not being a foreign company, incorporated in a foreign country or territory;
- A multi-national corporation 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 incorporated 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 accept foreign assistance according to FCRA, 2010:
- Prior Permission
FCRA for NGO: A Ngo can receive funds from abroad if it has an FCRA certificate. To get an FCRA certificate, the NGO should be three years old.
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 themselves are actively involved in activities that promote social, economic, cultural, and ecological growth and prosperity. So check the details information one by one.
Eligibility criteria for grant of registration:
- For 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 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 utilised. The applicant NGO/association are liberal to choose its items of expenditure (excluding the executive expenditure 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.
- If the association wants inclusion of its capital investment in assets like land, building, other permanent structures, vehicles, equipment etc, then the Chief Functionary shall must give an undertaking that these assets shall be utilized just for the FCRA activities and that they won’t be diverted for the other 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
Frequently Asked Questions
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 nature are available on the website — http://mha.nic.in/fcra/
Whether donation given by an Indian origin and having foreign nationality is 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? Ans.
Yes. Any amount received from a ‘foreign source’ in rupees or foreign currency is construed as ‘foreign contribution’ under law. Such transactions, even in rupees terms, are considered foreign contributions.