Filing Of Annual Return
Is there any provision under FCRA, 2010 for disclosure of data relating to receipt and utilisation of FC by an Association through filing of returns?
Answer: Yes. The provisions of Rule 13 of FCRR, 2011 are reproduced below:
“13. Declaration of receipt of foreign contribution. –
(a) A person who has been granted a certificate of registration or prior permission shall place the audited statement of accounts on receipts and utilisation of the foreign contribution, including income and expenditure statement, receipt and payment account and balance sheet for every financial year beginning on the first day of April within nine months of the closure of the financial year on its official website or on the website as specified by the Central Government.
The Rule implies that Associations granted registration or PP must upload the audited statement of accounts on receipts and utilisation of the FC, including I&E statement, R&P account and balance sheet for every financial year within 9 months of the closure of the financial year, i.e., by 31st December, on Association’s official website or on MHA’s website [https://fcraonline.nic.in]. However, Rule 17 of FCRR, 2011 makes it mandatory to submit the Annual Return online in Form FC-4 on MHA’s website. Please refer to the answer to the next Question.
Note: It follows from Rule 13 that it should be the endeavour of every Association granted registration/PP under FCRA to create and maintain its official website. In the Forms for seeking registration/prior permission/renewal under FCRA, 2010, the applicant Association is required to indicate its official website address, if any. This implies that the Associations should endeavour to have their own official websites.
Rule 13 does not specify the duration for which the annual data relating to receipt and utilisation of FC should be kept in the website. Since Rule 17(7) of FCRR, 2011 mandates the Associations to preserve the accounting statements for 6 years, it is suggested that the annual data, if posted in their websites by the Associations, may also be retained there for 6 years.
 Clause 13(b) relating to submission of Quarterly Return has been omitted vide Foreign Contribution (Regulation) Amendment Rules, 2022 [G.S.R. 506(E) dated the 1st July 2022.]
What are the provisions relating to filing of Annual Return?
Answer: Section 18 of FCRA, 2010 prescribes as under‒
“(1) Every person who has been granted a certificate or given prior approval under this Act shall give, within such time and in such manner as may be prescribed, an intimation to the Central Government, and such other authority as may be specified by the Central Government, as to the amount of each foreign contribution received by it, the source from which and the manner in which such foreign contribution was received, and the purposes for which and manner in which such foreign contribution was utilised by him.
(2) Every person receiving foreign contribution shall submit a copy of a statement indicating therein the particulars of foreign contribution received duly certified by officer of the Bank or authorised person in foreign exchange and furnish the same to the Central Government along with the intimation under sub section (1).“
It may please be noted that violation of section 18 of the Act is an offence. Please refer to the reply to Q.228 for the quantum of penalty for compounding such violation.
The corresponding Rule 17 of FCRR, 2011, prescribes that‒
“(1) Every person who receives foreign contribution under the Act shall submit a signed or digitally signed report in electronic form in Form FC-4 with scanned copies of income and expenditure statement, receipt and payment account and balance sheet for every financial year beginning on the 1st day of April within nine months of the closure of the financial year;
(2) The annual return in Form FC-4 shall reflect the foreign contribution received in the exclusive bank account and include the details in respect of the funds transferred to other bank accounts for utilisation.
(3) If the foreign contribution relates only to articles, the intimation shall be submitted in Form FC-1.
(4) If the foreign contribution relates to foreign securities, the intimation shall be submitted in Form FC-1.
(5) Every report submitted under sub-rules (2) to (4) shall be duly certified by a chartered accountant.
(6) Every such return in Form FC-4 shall also be accompanied by a copy of a statement of account from the bank where the exclusive foreign contribution account is maintained by the person, duly certified by an officer of such bank.
(7) The accounting statements referred to above in the preceding sub-rule shall be preserved by the person for a period of six years.
(8) A ‘NIL’ report shall be furnished even if no foreign contribution is received during a financial year.
Provided that where foreign contribution has not been received or utilised during a financial year, it shall not be required to enclose certificate from Chartered Accountant or income and expenditure statement or receipt and payment account or balance sheet with Form FC-4.”
Is online submission of annual return mandatory?
Answer: Yes, it is mandatory for all Associations having registration/PP under FCRA, 2010 to file the annual return online in Form FC‒4 for every financial year (1st April to 31st March) within a period of nine months from the closure of the year, i.e., by 31st December of each year. Associations having registration must file the mandatory annual return online in Form FC-4 every year, whether or not they receive any FC during any FY. All PP holder Associations must submit the mandatory annual return online in Form FC-4 till the amount of FC for which they received the PP is fully utilised and, even if no transaction takes place during any FY, they must submit a NIL return. The return is to be filed online on MHA’s portal [https://fcraonline.nic.in].
Is online submission of annual return mandatory even for Associations that did not receive or utilise any FC during the financial year and, if yes, what are the requirements?
Answer: Yes; a ‘Nil’ return must be filed within the prescribed time limit even if no FC is received/utilised during a year. However, the proviso to Rule 17 of FCRR, 2011 prescribes that where an Association has neither received nor utilised any FC during a financial year, it shall not be required to enclose certificate from Chartered Accountant or I&E statement or R&P account or balance sheet with Form FC-4.
What are the details/documents required for filing the annual return in Form FC-4? What are the documents to be uploaded along with the Form FC-4?
Answer: The following details and documents are sought in Form FC-4:
- DARPAN ID of the Association;
- Name, address and FCRA registration/PP number and date;
- Brought forward FC at the beginning of the FY, quantum of interest accrued on FC, or any other income derived from FC, e.g., sale proceeds from assets created from FC, or interest thereon during the year and income from projects/activities;
- FC received during the FY with donor-wise details of and purpose of receipt;
- Cumulative purpose-wise (social, cultural, educational, economic, religious) amount of all FC received;
- Details of activities/projects for which FC was received and utilised;
- Utilisation for projects as per aims and objectives of the Association;
- Administrative Expenses as provided in Rule 5 of FCRR, 2011;
- Details of purchase of fresh assets, objectives for such purchase and cost thereof;
- Details of movable assets created out of FC as on 31st March of the FY and value of such assets at the beginning of the FY; value of assets disposed of during the FY;
- Details of immovable assets created out of FC as on 31st March of the FY;
- FC transferred to other person/Association before 29/09/2020 with date of such transfer, name of the transferee, purpose and amount transferred;
- Total amount of FC utilised during the year;
- Details of unutilised FC;
- Total FC invested in term deposits-opening balance of FD, FD made during the year, realisation of previous FD and closing balance of FD;
- Total balance of unutilised FC-cash in hand, in FC designated bank account(s) and utilisation accounts;
- Details of foreigners as key functionary/working/associated;
- Details of land and buildings that remained unutilised for more than two years with location, year of acquisition, purpose of acquisition and reasons for unutilisation;
- Details of FCRA Account in SBI, NDMB for receipt of FC through SWIFT mode;
- Details of another FCRA Account, if any, for keeping or utilising FC (as on 31st March of the year ending);
- Details of all Utilisation bank account(s), if any, for utilisation of FC (as on 31st March of the year ending);
- The I&E statement, R&P account, and balance sheet, duly audited by a Chartered Accountant; [to be uploaded (PDF format/Size: 50 MB)];
- Statement of account from the FCRA account in SBI, NDMB and the bank(s) where the another FCRA Account and Utilisation Account(s) are maintained, duly certified by an officer of such bank; [to be uploaded (PDF format/Size: 10 MB)];
- Declaration certificate of Chief Functionary; [to be uploaded (PDF format/Size: 1 MB)];
- Certificate from the Chartered Accountant, duly signed and sealed with C.A. registration number; [to be uploaded (PDF format/Size: 1 MB)]
- Scanned image of Chief Functionary’s signature; [to be uploaded; (JPG/JPEG format/Size: 50 KB (Max.)/Dimension – (140 (Width)*60 (Height) Pixel]
- Scanned image of Seal of the Association; [to be uploaded; (JPG/JPEG format/Size: 100 KB (Max.)/Dimension – (140 (Width)*60 (Height) Pixel]
Therefore, all the above documents should be prepared and saved in the computer before one starts filling in the online form. Associations which have neither received nor utilised any FC during a FY, are not required to enclose certificate from the C.A. or I&E statement or R&P account or balance sheet.
(i) If the foreign contribution relates to both money and articles, the intimation shall be submitted in Form FC-4 only.
(ii) If the FC relates only to articles and foreign securities, the intimation shall be submitted online in Form FC-1 and the value of such articles/securities shall also be reflected in online Annual Return in Form FC-4.
What other points should be kept in mind for filing the Annual Return?
Answer: The Chief Functionary has to give declaration that the particulars submitted in the Form are correct and affirmation that the receipt of FC and its utilisation have not been violative of any of the provisions of FCRA, 2010, FCRR, 2011 and notifications or orders thereunder and that the FC was utilised for the purpose(s) for which the registration/PP was given. Apart from the above declaration and affirmation, answers to the following are also to be given and wherever the answer to any of the questions is in the affirmative, brief details must be provided vide Item No. 8 of Form FC-4:
Whether during the period under report:
(i) any foreign contribution was transferred to any FCRA registered association?
(ii) any foreign contribution was transferred to any non-FCRA registered association?
(iii) any functionary of the Association has been prosecuted or convicted under the law of the land?
(iv) any asset created out of foreign contribution is registered in names other than the name of Association?
(v) any domestic contribution has been credited in any “FCRA Account”?
(vi) the Association has received any foreign Contribution in an account other than the designated FCRA receipt Account?
(vii) the Association has utilised foreign contribution for any purpose other than the defined purposes in the FCRA certificate of registration or prior permission?
(viii) the Association has invested any foreign contribution in any speculative activity as defined in rule 4 of the Foreign Contribution (Regulation) Rules, 2011?
(ix) the Association or any of its functionary/office bearer has violated any of the conditions as enumerated under sub-section (4) of section 12 of the Act?
(x) the Association has made expenditure on administrative expenses exceeding 20% of the foreign contribution received?
(xi) any fixed asset acquired out of foreign contribution has been sold out?
(xii) sale proceed of above fixed asset has been diverted/ has not been deposited in “FCRA Account”?
(xiii) any FD proceeds has been credited in any account other than the “FCRA Account”?
(xiv) any organization/ entity not belonging to the Association is being managed/financially supported by the Association?
(xv) the Association has utilised any foreign contribution outside India?
It may please be noted that all the above questions seek information relating to violation of some provision of FCRA.
How to file Annual Return online?
Answer: The process is rather simple. The website http://fcraonline.nic.in/ contains the sample form FC-4, detailed instructions as to how to fill the form, documents required to be uploaded in PDF format, size limits of the documents to be uploaded and instructions for scanning the requisite documents.
Item 5 of Form FC-4 seeks details of foreigners in an Association as key functionary/working /associated. Is there a restriction under FCRA for foreigners to work for the NGOs either voluntarily or as employees?
Answer: There is no provision under FCRA/FCRR imposing restriction on foreigners to work for the NGOs either voluntarily or as employees. Employment of foreigners in India is regulated by the provisions relating to issue of Visa to them. As per regulations, a foreigner cannot work in India without having necessary employment Visa (E-Visa) permitting him/her to work in India. The person concerned must obtain E-Visa even if he/she desires to come to India for honorary work (without salary) with an NGO registered in India for working on voluntary basis. Foreign nationals who wish to come to India for honorary work (without salary) with NGOs registered in India are granted E-Visa up to one year duration. A foreigner eligible for honorary work with NGOs may be paid an honorarium up to a ceiling of Rs. 10,000 per month. However, if the foreigner is to come as an employee of an NGO, his/her total remuneration must not be less than INR 16.25 lakh per annum. Foreigners seeking such employment is granted E-Visa in cases where salary/remuneration is paid in India. The salary threshold limit of Rs. 16.25 lakh per annum is to be worked out taking into account the salary and all other allowances paid to the foreign national in cash and also perquisites like rent free accommodation etc. which are included in the salary for the purpose of calculating income tax. Such perquisites should be quantified and indicated in the Employment Contract. However, Bangladeshis, who are married to Indian nationals and who are not eligible for registration as OCI must draw a minimum salary of Rs. 9.10 lakh per annum for being eligible for grant of E-Visa. In case of foreign nationals coming on E-Visa for a period of less than one year, the minimum salary requirement will be worked out on pro-rata basis. The E-Visa is granted by the Indian Mission or Post abroad with special endorsement on his/her E-Visa “To Work with NGO— (Name of the NGO and place of work)” subject to usual checks and formalities. The foreigner may be granted a multi-entry E-Visa for 1 year initially. All registration formalities as per rules, after his/her arrival in India, should be strictly complied with and the registration must be done with the Foreigners Regional Registration Office (FRRO)/ Foreigners Registration Office (FRO) within 14 days from the date of his/her arrival. The visa may be extended by the FRRO/FRO/State Governments/Union Territories beyond the initial visa validity period up to a total period of 5 years from the date of issue of the initial E-Visa, on a year-to-year basis, subject to good conduct, production of necessary documents in support of continued employment and no adverse security inputs about the foreigner. Change of employer (NGO) by the foreigner during the currency of the E-Visa is not permissible without prior permission of MHA. All NGOs and foreigners desirous to work with an NGO in India, even if on voluntary basis without any remuneration, should ensure compliance of the regulations. In this context, please refer to the answer to Q. 99 also.
OCI (Overseas Citizen of India) card holders do not need to get a separate employment visa and are not required to register with FRRO for seeking employment. They may take up employment in all areas except mountaineering, missionary and research work and other work requiring Protected Area Permit (PAP) and Restricted Area Permit (RAP). However, for the purpose of reporting in Item 5 of Form FC-4, the number of such OCI employees, if any, should be taken into account because OCI cardholders are foreign citizens and having OCI status is not the same as being an Indian citizen.
How the value of the articles and foreign securities received as FC would be computed? Does FCRA, 2010 or FCRR, 2011 prescribe any method for such valuation?
Answer: The value of the FC received as articles, i.e., in kind, is to be added to the FC received in cash to compute the total FC received in a year. There is no guideline for valuation of the articles. The Chartered Accountants may derive an approximate and reasonable valuation using the market price, facts and data provided by the Association, viz., shipping declaration, bill of lading, declaration from donor etc., for the purpose of reporting in Form FC-4. As for securities, their nominal face value and market value, as on the date of receipt, may be indicated in Form FC-1.
Some Associations may receive FC in the form of software from Microsoft, Adobe etc. How such FC is to be shown in the annual return — as currency or gift?
Answer: Such contributions may be shown in Form FC-4 at its estimated market value.
Is it possible for an Association to submit a revised annual return online after it notices that there are errors in the return already submitted?
Answer: No. It should be noted that after final submission of the online return, the same cannot be modified and one should be extremely cautious in this regard and heed to the warnings given during the process of online submission of the return. However, in case of an error, the Association should immediately send e-mail to https://helpdesk.fcraonline.gov.in or email@example.com informing about the mistakes committed.
What happens in those cases where Associations are not in a position to submit the annual return online?
Answer:There is no other option but to submit the annual return online. The annual return in hard copy will not be accepted and submission of the same in hard copy will be treated as non-submission of return.
What may be the consequences if there is a delay in filing the annual return?
Answer: FCRA, 2010 and FCRR, 2011 do not envisage delay in filing the annual return by an Association having registration or prior permission. Simply put, the annual return must be filed within a period of nine months from the closure of a financial year, i.e., by 31st December of each year unless the prescribed date is extended in special circumstances for all Associations. Non-submission of the return within the prescribed date would be a violation of the Act. There is a penalty for compounding the offence punishable under Section 37 of FCRA, 2010 for non-furnishing of intimation of the amount of each foreign contribution received and the source from which and in the manner in which, such foreign contribution is received as required under Section 18 of the Act vide reply to Q. 228. It should be noted that the penalty is for compounding the offence of non-submission of annual return within the prescribed date, notwithstanding whether any FC was received or not in the previous financial year. Therefore, non-submission of even a ‘Nil’ return within the prescribed date in case where foreign contribution was not received during a financial year would also attract penalty. It may also be noted that in the case of a delayed return, the online portal of MHA will notify the Association about the delay and the amount of penalty to be paid online at the time of filing the return.
What will happen if the annual return is not filed at all?
Answer: This would be a serious violation of the Act and would make the Association liable to imposition of penalty by MHA and subsequent cancellation of registration if the penalty is not paid. This may also lead to prosecution. Please note that any person whose registration has been cancelled shall not be eligible for registration or grant of prior permission for a period of three years from the date of such cancellation.
Could an Association whose FCRA registration has been cancelled for non-submission of annual return apply for its restoration and if so, how?
Answer: The Association concerned may submit a request for compounding its offence and restoration of the cancelled FCRA registration. However, it will depend on the case and MHA’s discretion whether or not to allow the association to pay the penalty for compounding the offence and restoration of registration.
Will non-submission of annual return adversely affect renewal of registration under FCRA, 2010?
Answer: Yes. Renewal of registration will depend on whether various provisions of FCRA/FCRR were adhered to by the Association. In cases where the annual returns were not filed within due date or were not filed at all and the violation of non-submission/delayed submission of return was not compounded, it is most likely that the registration would not be renewed because of violation of the Act. If the registration already stands cancelled by MHA because of this violation, the question of its renewal will not arise.
Does an Association which has been placed under PP category (but continues to hold registration) require to file its annual return so long as there remains unutilised foreign contribution?
Answer: An Association registered under FCRA must submit its annual return within the stipulated period. In the instant case, since the Association continues to hold FCRA registration, it must submit its annual return notwithstanding the fact of its being placed in PP category. Possession of unutilised FC or non-possession of any FC is not the criteria for filing the return. Therefore, the Association should continue to file its annual return even if prior to being placed in PP category, it had either fully utilised the FC received or had some unutilised FC in possession.
What should an Association having prior permission to receive FC do for filing the mandatory annual return if it gets FCRA registration subsequently?
Answer: It may so happen that an Association which has been granted PP gets FCRA registration subsequently and at the time of its registration, it had some unutilised FC and/or was to receive some FC from the donor for which it is having PP. In such a case, it should furnish the annual return online as a FCRA registered Association, duly quoting the amount of FC received and source thereof.