FCRA REGISTRATION IN INDIA

FCRA REGISTRATION IN INDIA

The Government of India in order to regulate the receipt of Foreign Contribution in India has introduced an act known as FCRA 2010


Introduction

Section 8 companies, Trusts, Society (ies), Other institutions, association and NGO’s which receives the foreign contribution or donation from abroad are required to obtain registration under Section 6(1) of Foreign Contribution Regulation Act, 2010

The Indian Government Authority issues the FCRA Registration Certificate. Ministry of Home Affairs prescribes the rules and regulations for the FCRA department. The main objective of such registration is to legalize the receipt of contribution from any foreign sources by the Indian entities.

And also to ensure that the fund received by the domestic entities must be used for only that purpose for which it has been received.
 

Types of FCRA Registration

There are two types of FCRA Registration, one is proper FCRA registration and other is prior permissions. 
 

A.  Proper FCRA Registration

To apply for proper FCRA registration, one should meet the following minimum requirements:

  1. The applicant has to be a registered entity and should be operating for a minimum period of 3 years.
     
  2. In the last 3 years, the entity must have spent at least Rs. 10 Lakhs for achieving its main objective for which it has formed.  Any kind of administrative expense will not be counted in this amount.
     
  3. An audited financial statement of last 3 years has to be submitted. These financial statements have to be audited only by a qualified Chartered Accountant/Firms of Chartered Accountants.
     
  4. Activity Report of the activities done by the association pursuant to its objectives in the last 3 years.
     
B.  Prior Permission FCRA Registration

In case of  newly incorporated organizations, who are  keen to receive any kind of foreign contribution, then they can opt and apply for Prior Permission under FCRA.

Such entities have to meet the following minimum requirements in order to apply for prior permission FCRA:

  1. At the time of making the application, the details of foreign owner and the foreign contribution must be specified.
     
  2. The amount received from the foreign entity should be used only for the specific purpose.
     

Eligibility Criteria for FCRA Registration

The following are the eligible entities and few criteria for FCRA registration:

  • Trust as registered under Indian Trusts Act, 1882;
     
  • Society as registered under Societies Registration Act, 1860;
     
  • Section 8 Companies registered under Companies Act, 2013.
     
  • The entities must have been formed with the purpose of doing charity, to serve the general public at large in any manner like promotion of health, education, art, cultural, religious, sports etc.
     
  • It is mandatory to check that the entities must not have been prohibited as per Section 3 of the Foreign Contribution (Regulation) Act, 2010.
     
  • The foreign contribution which is received by the domestic entity should not be used for any illegal activities by putting the people’s life at danger.
     


 

Who cannot apply for FCRA registration?

The following cannot apply for FCRA registration:

a.    The applicant is made up or Benami.

b.    If any prosecution is conducted on the applicant in case of indulging in any unfair activity

c.    The entities that has been convicted or prosecuted for making any kind of communal tension in any area of specified district or any part of the country

d.    Engaged in any violent activities

e.    The applicant has utilized the foreign contribution for its personal use

f.    Any entity de-bared for accepting any foreign receipt or foreign grant under any provision of law.

g.    Any receipt of foreign grant that affects prejudicially:

  • The sovereignty of India
  • Public Interest
  • Relationship with any state.
     

Documents required for FCRA registration

Prior to obtain the FCRA registration, it is mandatory for the NGO’s to have a DARPAN ID. In order to get the DARPAN ID, they are required to register themselves on the portal of Darpan as provided by the NITI Aayog

In recent times, DARPAN Id has been made optional for applying in the FCRA Registration.
 

1.  In case of Registration
  • Copy of registration certificate/Trust deed etc., of the applicant. It should be self certified
  • NGO’s PAN card;
  • A copy of relevant pages of Memorandum of Association/Article of Association/Trust Deed that shows the main objects of the association. 
  • Specimen signature of the chief functionary in .jpg format alongwith organization seal.
  • Last three years Activity Report.
  • Last 3 years copy of audited Assets and Liabilities, Receipt and Payment, Income and Expenditure statement etc. reflecting the expenditures.
  • A full disclosure related to the present and past management of the trust.
  • Previous 3 years annual report of the NGO and details of work done by it
  • A certified true copy of the resolution passed by the Governing Body of the NGO.
  • A Copy of certificate issued by the Income Tax Authority under 80G & 12A of the Income Tax Act.
  • Affidavits to the effect that the all the declarations and information given is correct and nothing has been hided from the department.
  • FCRA Bank Accounts Cancelled Cheque/Bank Statement, in which proposed foreign contribution is ought to be received.
     

Note : All the above mentioned documents must be self certified.
 

2.  In case of Prior Permission
  • A copy of registration certificate/Trust deed etc., of the applicant.
  • NGO’s PAN card/
  • A copy of relevant pages of Memorandum of Association/Article of Association/Trust Deed that shows the main objects of the association.
  • Specimen signature of the chief functionary in jpj format.
  • A copy of duly signed approval or commitment letter from the foreign contributor.
  • Last 3 years copy of audited Assets and Liabilities, Receipt and Payment, Income and Expenditure statement etc. reflecting the expenditures.
  • A complete detail about the current and past management of the trust.
  • A certified true copy of the resolution passed by the Governing Body of the NGO.
  • A Copy of certificate issued by the Income Tax Authority under 80G & 12A of the Income Tax Act.
  • Affidavits to the effect that the all the declarations and information given is correct and nothing has been hided from the department.
  • FCRA Bank Accounts Cancelled Cheque/Bank Statement, in which proposed foreign contribution is ought to be received.
     

Note : All the above mentioned documents must be self certified.
 

FCRA Registration Process

The step by step online process of applying for FCRA license:

  • Visit the official website of FCRA https://fcraonline.nic.in. 
  • Then, the applicant is required to fill the online application in Form FC-3. 
  • Click the option “FCRA Online Forms” for FCRA registration.
  • On the next page several options like application for seeking the permission of the central government, foreign receipt intimation, application for FCRA registration, etc. will be available. There click on the option called “Apply Online” under Application for FCRA Registration (FC-3).
  • Entities who are new to the portal will be required to sign up by providing all the mandatory details, for the registration purpose. Then submit the information.
  • Then the entities will be provided with “User id” & Password.
  • After that they have to again visit the FCRA website, and login by using the login credentials.
  • Then fill the registration form with the mandatory details.
  • After that attach the documents in PDF Format as required. Then click on submit button.
  • Then pay the prescribed fees via online payment gateways.
     

Finally after the proper scrutiny of the application along with the documents and the same is found satisfactory, the department will issue the FCRA registration. But in case there is any discrepancies, the department can either reject or will require you to resubmit the application.
 

Validity of FCRA Registration

A.    FCRA registration under normal course

The FCRA registration is valid for 5 years from the date of approval. And after the expiry of this period, it can be renewed for receiving any further foreign contribution.
 

B.    In case of Prior Permission

Under Prior permission, the validity of the registration is:

i.    Upto 5 years from the date of registration or;

ii.    Till the time, the foreign contribution is fully utilized for which the prior permission was granted.
 

Renewal of FCRA License

FCRA registration is valid for 5 years, and can be renewed after making a fresh application. Within the following time, the entities should make a renewal application for FCRA registration:

  • A renewal application should be made at least six months before the date when the license is getting lapsed.
     
  • In cases the entity is operating on a multi-year project, then the renewal application should be made at least 12 months before the registration lapses.
     

Cancellation/Suspension of FCRA Registration

If the authorities find that the entity is not working as per the provisions of law, then the authority after giving a warning notice can cancel the registration. Some of the reasons that can be considered for cancelling the license are:

  • In case the NGO fails to comply with the provisions of the Foreign Contribution (Regulation) Act.
     
  • The entity failed to submit an annual return within the due date, as prescribed, generally within 9 months from the closure of Financial year, i.e. 31st December every year;
     
  • On the organization, if any inquiry is being conducted for any allegation imposed for any wrongdoing in operations, and such allegation turned out to be true
     
  • The entity is not using the foreign contribution for the purpose for which it is obtained.
     

Post FCRA registration

In Form FC-4, the registered entities are required to file a return annually. This return must be certified by a qualified Chartered Accountant. The following documents are required to be submitted with the return and they are:

  • Income and expenditure statement,
     
  • Balance sheet
     
  • Statement of receipt of Foreign contribution and
     
  • Payment made by the entity.
     

The FC-4 must be submitted within 9 months of the closing of every financial year i.e. by 31st December of every year.
 

FREQUENTLY ASKED QUESTIONS (FAQ’s)
 

What is FCRA?

Government of India in order to regulate the receipt of Foreign Contribution in India has introduced an act known as Foreign Contribution Regulation Act, 2010 or better known as FCRA. Section 8 companies, trust, society, any institution, association and NGO’s which receives the foreign contribution or donation from abroad are required to obtain registration under Section 6(1) of Foreign Contribution Regulation Act, 2010. 
 

What are the types of FCRA registration?

There are two types of FCRA Registration, one is proper FCRA registration and other is prior permissions. 
 

Who are eligible to apply for FCRA registration?

The following are the eligible entities and few criteria for FCRA registration:

  • Trust as registered under Indian Trusts Act, 1882;
  • Society as registered under Societies Registration Act, 1860;
  • Section 8 Companies registered under Companies Act, 2013.
  • The entities must have been formed with the purpose of doing charity, to serve the general public at large in any manner like promotion of health, education, art, cultural, religious, sports etc.
  • It is mandatory to check that the entities must not have been prohibited as per Section 3 of the Foreign Contribution (Regulation) Act, 2010.
  • The foreign contribution which is received by the domestic entity should not be used for any illegal activities by putting the people’s life at danger.
     
What is Prior Permission FCRA registration?

In case a newly incorporated organization is keen to receive any kind of foreign contribution, then it can opt and apply for Prior Permission FCRA registration. Such entities have to meet the following minimum requirements in order to apply for prior permission FCRA registration:

i.  At the time of making the application, the details of foreign owner and the foreign contribution must be specified.

ii.  The amount received from the foreign entity should be used only for the specific purpose.
 

What is the validity period of FCRA registration done under normal course?

The FCRA registration done under normal course  is valid for 5 years from the date of approval. And after the expiry of this period, it can be renewed for receiving any further foreign contribution.
 

What is the validity of prior permission FCRA registration?

Under Prior permission, the validity of the registration is:

i.  Upto 5 years from the date of registration or;

ii.  Till the time, the foreign contribution is fully utilized for which the prior permission was granted.
 

Can FCRA registration be renewed?

Yes, FCRA registration can be renewed.
 

On what grounds can the FCRA registration gets cancelled?

If the authorities find that the entity is not working as per the provisions of law, then the authority after giving a warning notice can cancel the registration. Some of the reasons that can be considered for cancelling the license are:
 

  • In case the NGO fails to comply with the provisions of the Foreign Contribution (Regulation) Act.
  • Fails to submit an annual return within the due date
  • On the organization, if any inquiry is being conducted for any allegation imposed for any wrongdoing in operations, and such allegation turned out to be true
  • The entity is not using the foreign contribution for the purpose for which it is obtained.
     
Which form is required to be filed post FCRA registration?

Form FC-4 are required to be filed annually by the registered entities.
 

Within what time the form FC-4 needs to be filed?

The Form FC-4 must be submitted within 9 months of the closing of every financial year i.e. by 31st December of every year.
 

What other documents are required to be submitted with FC-4?

In Form FC-4, the registered entities are required to file a return annually. This return must be certified by a qualified Chartered Accountant. The following documents are required to be submitted with the return and they are:
 

  • Income and expenditure statement,
  • Balance sheet
  • Statement of receipt of Foreign contribution and
  • Payment made by the entity.
     

Conclusion

It is advisable that the NGO’s or NPO’s must get the FCRA registration, if they are receiving the Foreign contribution or donation.
 

Edited by Minu Mishra