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FCRA stands for Foreign Contribution Act, passed in 2010. In today’s world, technology is changing/developing at such a rapid pace, that each and every person across the world are connected with each other. One example of such advancement is the easiness inflow of foreign exchange into and out of the country, without much compliance. The Ministry of Home Affairs made amendments to its Foreign Contribution Regulation Act 2010, in order to keep track of this currency flow.
The NGOs are not allowed or restricted from taking foreign contributions directly. For this purpose, they are required to get registered under the Foreign Contribution Regulation Act 1976, commonly known as the FCRA Registration in India.
There are generally 2 types of contribution which are received from the foreign source, namely - one-time contribution and more than once and even regular contribution. For a single-time contribution, the NGOs can receive the amount of contribution by seeking prior permission of the FCRA registration Section of the Ministry of Home Affairs, whereas in case of multiple and regular contributions it is advisable to seek permanent registration from the said Ministry.
For this, an application is to be made by the NGO, which should be in working for at least three years after its due registration, to the Secretary to the Government of India, in the prescribed Form FC-8 along with the required enclosures i.e. Memorandum & Rules, the Trust Deed, Certificate of Registration, or any other proof of registration, audited financial statement and activity report of the last three years, and if the possible letter of the prospective donor.
The Ministry then notify the acceptance to local intelligence people for verification of the credentials and records of the organisation. On their positive remarks, the FCRA Section of the Ministry issues the Certificate of Registration to the applicant organisation and acknowledges them about the same in the prescribed form.
It is essential for an NGO to receive foreign contribution only in one designated bank account which they are required to open with AD banks regulated by RBI. Therefore, the applicant organisation should open a fresh bank account with the intention to operate it for such funds and mention it in the application. The said Ministry will communicate directly to the said bank for keeping a watch on the use of the foreign contribution and report back to the Ministry in case of any discrepancy.
The organisations after getting registered under the FCRA shall have to maintain separate accounts for transactions under the foreign contribution head and submit a return in the prescribed format to the Ministry along with the statement of accounts, duly audited by an accountant, of the previous year by 31 July every year.
The organisations registered under the FCRA is under an obligation to inform the Ministry about any change in name of the organisation, its Registered Office and aims and objects within 30 days of the applicable change. Similarly, there is a need to obtain prior permission from the said Ministry for any such change in the designated bank or replacement of more than half members of the governing body who were present at the time of FCRA Registration in Delhi.
BENEFITS OF FCRA REGISTRATION
The FCRA's common aim is to help organizations working in favor of and improve society and participating in social activities such as NGOs. In this sense, the FCRA is a law passed on Foreign Contribution Regulation Act, 2010. Elsewhere there are some FCRA registration potential benefits:
- Helps receive legally any foreign or state aid when registered under Foreign Contribution Regulation Act, 2010
- 12A Registration gives the benefit that the income of the society shall not be taxable. This is one-time registration.
- 80G Registration means the Donor can claim exemption. This is periodic registration.
- Benefits in taking grants from Govt./Abroad/ other Agencies without any taxability.
- Benefit as to freely accepting foreign donations without any taxability and compliance.
- Any NGOs, like company, society, or public trust registered under FCRA may receive donations from external bodies, Some are as follows:
- New Zealand High Commission
- European Commission
- Ford Foundation
- Infinity Foundation
- British High Commission
- Canada High Commission
Kind of FCRA Registration under FCRA, 2010
There is 2 kind by which FCRA registration under FCRA, 2010 can be made in order to receive any kind of foreign exchange contribution from outside India:
- Prior Permission: https://fcraonline.nic.in/FC3.aspx?Resp_Id=6
- Proper Registration: https://fcraonline.nic.in/FC3.aspx?Resp_Id=1
DOCUMENTS REQUIRED FOR FCRA REGISTRATION
The following documents are required to be filed for obtaining registration:
- Form FC-8 duly is required to be filled up in triplicate form.
- An audited statement of accounts of the organisation for the past 3 years.
- Copy of Annual Report prescribe activities of last five years.
- Detail of the beneficiaries along with the socio-economic factors of the region in which the NGO is working and providing their service.
- List and geographical detail of each and every state, and districts in which the NGO is working and providing their service.
- Certified copy of the Registration Certificate
- Certified copy of the Bye-laws and Memorandum of Association and Article of Association of the NGO whichever is applicable
- Copy of certificates of exemption or registration issued u/s. 80G and 12A respectively by the Income Tax Department.
- Copy of any prior permission granted to the organization
- Copy of resolution by the Governing Body of the organisation which authorises the NGO for the registration under FCRA
- the resolution of Governing Body or Power of Attorney or by which the Chief Functionary is authorised required to be to submit in form FC-8
- List of present members of the Governing Body of the organisation and the office bearers who are holding the office at the time of FCRA registration.
- If the association is having any parent or subsidiary organisation, which is registered under the FCRA, then the registration number of such organisation along with the Ministry of Home Affairs file number should be mentioned
- If any application has been submitted before by the association then its reference number should be mentioned
- If such association has received any foreign contribution with or without any prior approval of the Central Government, then the detail of receipt of such contribution be also provided
- In the case of a recipient organisation, the FCRA is authorized to register with the recipient organisation, if:- If the Chief Functionary of the recipient organization is not part of the donor organisation, The donor organization should not include at least 75 percent of the members of the Governing Body of the recipient organisation.
Prior Permission Registration Additional Documents Required
- Chief Functionary Signature in JPG format.
- Registration Certificate of the Association or Certified copy of the Trust Deed
- A letter of commitment Duly signed from Donor.
It may be noted that we will try to ensure you that our association's responsibility to be registered with FCRA thus before accepting foreign contribution it is the responsibility of the NGO to ensure all the requisite formalities are complied with and FCRA registration is granted before accepting foreign exchange from outside India.
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