Fundamentals of FCRA

Nutshell

• Any contribution or donation in the form of any article, currency (whether in INR or in foreign currency) or security received only from a foreign source is treated as ‘foreign contribution’ (FC).

• The source that is making the contribution is the deciding factor, neither the currency in which the contribution is made nor the bank through which the currency is remitted. If the source is foreign, irrespective of the donor’s location in India or abroad, the donation either in cash, cheque or through bank remittance or in the form of any article or security will be treated as FC.

• Contributions made by a citizen of India living in another country, i.e., a Non-Resident Indian holding valid Indian passport, is not treated as FC but, donation from an Indian who has acquired foreign citizenship including OCI/PIO cardholders is treated as FC.

• Acceptance of FC in any form, whether in currency or in kind, without obtaining registration or PP from the Central Government constitutes violation of FCRA.

• FC must be utilised only for the purpose for which it is received.

• Separate set of accounts and records must be maintained exclusively in respect of receipt and utilisation of FC.

• Local/domestic receipts/accounts/records must not be mixed up with the accounts/records relating to receipt & utilisation of FC.

• Contributions/donations from foreign sources, whether located overseas or in India, should be received only in the exclusive designated ‘FCRA Account’ at SBI, NDMB mentioned in the order granting registration or PP.

• ‘Another FCRA Account’ may be opened in any other scheduled commercial bank for keeping or utilising the FC received in the designated FCRA Account at SBI, NDMB and for depositing some other FC receipts generated in India as indicated in FCRA Charter for Banks.

• Utilisation Account(s) may be opened for utilising the FC under intimation to MHA and FC may be transferred to such Utilisation Account(s) from the designated ‘FCRA Account’ at SBI, NDMB or from the ‘Another FCRA Account’.

• No funds other than FC can be received/deposited in any of the above-mentioned FC bank account(s). Inter-account transfer of funds between the utilisation accounts should not be done.

• Any person, who has been granted registration or PP, must furnish mandatory annual return online in Form FC-4 regarding receipt and utilisation of FC within 9 months of the closure of the relevant financial year.

• Even if no transaction takes place during a year, a ‘Nil’ return must be submitted.

• All fixed assets acquired/created out of the FC and any article received in kind from any foreign source must be in the name of the Association and not in the name of any individual.

• Expenditure on ‘administrative expenses’ should be limited to 20% of FC received during any financial year.

• FC or any income arising out of it must not be invested in mutual funds or any speculative business.

• FC must not be transferred to any other person.

• Registration granted under FCRA shall be valid for a period of 5 years from the date of its issue and application for renewal of registration must be made within six months before the expiry of the period of the certificate.

• Intimation to MHA must be given for changing the name, address, nature, aims and objectives, FCRA Account, opening of Utilisation Account(s) and change of any office bearer etc. (within 45 days of such change) as per the prescribed procedure.