Complete Understanding about FCRA aspect

Complete Understanding about Foreign Contribution Regulation Act aspect

Section 6(1) of the Foreign Contribution Regulation Act, 2010 requires charitable trusts, societies, and Section 8 companies that accept foreign contributions or donations to register under FCRA Act of 2010.

“Foreign contribution,” as defined in Section 2(1) (h) of the FCRA, 2010, is any donation, delivery, or transfer made by a foreign source by way of

Any article

(Exemption: An object provided as a gift for personal use to a person (including Individuals, HUFs, Companies, and Associations) whose market worth in India on the date of the gift does not exceed Rs. 25,000/-)

of any currency, whether Indian or foreign;
Any security described in Section 2(h) of the Securities Contracts (Regulation) Act, 1956, including any foreign security listed in clause (o) of Section 2 of the Foreign Exchange Management Act, 1999

Exclusion:- Any amount received from a foreign source in India as a fee (including fees charged by an educational institution in India from overseas students) or as a cost in lieu of goods or services rendered by such person in the ordinary course of his business, trade, or commerce, whether within India or outside India, or any contribution received from an agent or a foreign source towards such fee or cost in lieu of goods or services rendered by such person in the ordinary course of his business, trade, or commerce, whether within India or outside India, or any contribution

Eligibility Criteria under FCRA registration :-

FCRA Applicant should be registered either under Societies Registration Act, 1860 or the Indian Trusts Act, 1882 or under Section 8 (erstwhile Section 25) of the Companies Act, 2013
The not-for-profit organization must have been in operation for at least three years before to filing the FCRA application, and it must not have received any foreign contributions prior to that without the consent of the government.
In the last 3 years the organization should have spent at least Rs. 15, 00,000/- on its aim and objectives, excluding administrative costs.
Statements of Income and Expenditure for the last three years, duly audited by a Chartered Accountant, must be presented to verify that it satisfies the financial parameters.

If a newly registered entity wants to receive foreign donations, the Ministry of Home Affairs can give permission for a specific activity, specific purpose, and from a specified source using the Prior Permission (PP) procedure.

Administrative Expenses: - As per the FCRA Amendment act, 2020 the ceiling limit of administration expenses is 20% of the total foreign funds utilized in a particular year. In other words, a FC registered organization cannot spend more than 20% of the FC utilized in that year on administrative expenses. However, can spend more than 20% with the prior approval of CG.

Administrative expenses include salaries, wages, travel expenses, expenses towards hiring of personnel for management, electricity or water charges, telephone charges, postal charges, stationery and printing charges, legal and professional charges, rent of premises, cost of writing and filing reports, expenses towards running and maintenance expenses, cost of accounting and administered funds and other utilities.

Separate bank account in SBI for getting contributions from abroad

The foreign contribution shall be received exclusively in a Bank's unique single FC account (also known as designated FC account) which shall be open in SBI, Sansad Marg, Main Branch, New Delhi as specified in the amendment rule. Organization can open account from any place in India without visiting physically to New Delhi. In this regard, a detailed SOP of State Bank of India is available in public domain on the portal of SBI & FCRA.

Provided that if they want to receive contribution in any other account other than the specified one then in such cases, intimation in FC-6 is to be given online within 15 days of opening of such account.

Application for FCRA registration are required to be submitted online using Form FC-3 along with all the relevant documents at the website fcraonline.nic.in:-

Darpan ID and Aadhar Number

A self-certified copy of the association's registration certificate/trust deed, etc.
Self-certified copy of appropriate pages of the Memorandum of Association/Articles of Association, describing the association's goals and objectives.
Activity Report during the last three years indicating details of activities;
Copies of appropriate audited statement of accounts for the last three years (Assets and Liabilities, Receipt and Payment, Income and Expenditure) that clearly indicate expenditure on the association's goals and objectives as well as administrative expenses;
Fees of Rs. 10,000 and Rs. 5000 is to be paid online through payment gateway in case of registration and prior permission.

Validity & Renewal

FCRA registration is valid for 5 years after it is obtained. To keep the FCRA registration active, applications for renewal are submitted six months before the expiration date.

Compliance Procedure

Return to be filed under FCRA

Annually: Mandatory submission of Annual Return online in prescribed form FC-4 duly certified by Chartered accountant includes-

Duly signed and seal chartered accountant certificate (with CA Registration No.)
Balance of the foreign contribution at the beginning of the year.
Foreign contribution received during the year.
Unutilized balance of foreign contribution during the year
Certify that association has maintained account of foreign contribution and records specified in FCRA Act, 2010
Audited statement of account (payment account, income and expenditure statement and balance sheet)
Statement of Account from Bank duly certified by the officer of such bank.
Declaration certificate of chief functionary

Submission of ‘NIL’ return is mandatory, if there is no receipt/utilization of foreign contribution during the year. However, in such case certificate from chartered accountant, audited statement of accounts is not required to upload.

Quarterly: Quarterly disclosure of foreign receipts and details of donors within 15 days from the last date of quarter in which the funds received. The form of quarterly returns can be filed online.

FORMS APPLICABLE IN FCRA COMPLIANCE:

Particulars	Form	Time Limit
Intimation of receipt of foreign contribution by:- Gift from relative (if exceeds 1 lakh in FY) Articles/Securities Candidate for election	FC- 1 Part A Part B Part C	Within 30 days of receipt Within 30 days of receipt Within 45 days of being nominated
Application for permission to accept foreign hospitality	FC-2	2 Weeks before the proposed onward journey
Application for FCRA Registration Application for prior permission Application for renewal of Registration	FC-3A FC-3B FC-3C	No strict limit observed as such. Normally take 90 days. 6 months before expiry of FCRA Registration
Annual Return of Foreign Contributions	FC-4	Within 9 months from the closure of FY i.e. 31st December
Quarterly disclosure of foreign receipts and details of donors	-	Within 15 days from the last date of the quarter
Intimation for change of association, name, address, nature, aims, objectives, bank or branch of bank and change in more than 50% of the key members or new key member appointed, elects, resigns or dies.	FC-6	Within 15 days from the date of change
Surrender of FCRA Certificate	FC-7	After permission from central government

Last updated 3 years ago