Understanding Foreign Contribution Regulations in India

In India, any individual, association, or company seeking to receive foreign contributions or donations from foreign sources must adhere to the provisions outlined in the Foreign Contribution (Regulation) Act, 2010 (FCRA). Registration under the FCRA is essential for compliance with the law, and it is administered by the Ministry of Home Affairs, Government of India. Below are key aspects to be aware of regarding FCRA regulations:

Eligibility Criteria for Registration:

To be eligible for FCRA registration, an association or organization should meet the following criteria:

  • Be registered under an existing statute, such as the Societies Registration Act, 1860, the Indian Trusts Act, 1882, or Section 8 of the Companies Act, 2013.
  • Have been in existence for at least three years and have engaged in substantial activities related to its chosen field, benefiting society. The organization should have spent a minimum threshold of Rs. 10 lakhs during the last three years. If the organization includes capital investments in assets, these assets must be committed exclusively for FCRA activities.

FCRA Prior Permission:

For organizations in their formative stages, obtaining prior permission is an alternative to registration. To qualify for prior permission, the organization should:

  • Be registered under existing statutes like the Societies Registration Act, 1860, the Indian Trusts Act, 1882, or Section 8 of the Companies Act, 2013.
  • Submit a specific commitment letter from the donor, indicating the amount of foreign contribution and its intended purpose.

Additionally, certain conditions apply when both Indian recipient organizations and foreign donor organizations share common members:

  • The Chief Functionary of the recipient Indian organization should not be part of the donor organization.
  • At least 75% of the office-bearers/members of the Indian recipient organization's Governing Body should not be members/employees of the foreign donor organization.
  • In the case of a single foreign donor, at least 75% of the recipient organization's office bearers/members of the governing body should not be family members or close relatives of the donor.

Foreign Contribution Defined:

Foreign contribution encompasses various forms, including:

  • Articles with a market value in India not exceeding Rs. 25,000 (excluding gifts for personal use).
  • Currency, whether Indian or foreign.
  • Foreign securities as defined in relevant Acts.
  • Donations, deliveries, or transfers of articles, currency, or foreign securities received from foreign sources, directly or indirectly.

Foreign Source:

Foreign sources include:

  • Governments of foreign countries or territories and their agencies.
  • International agencies (excluding specific entities specified by the Central Government).
  • Foreign companies, corporations, and multinational corporations.
  • Organizations where a significant portion of share capital is held by foreign entities.
  • Foreign trusts, foundations, societies, clubs, and individuals.

Conditions for Registration and Prior Permission:

To obtain registration or prior permission under FCRA, the applicant must meet several conditions, including:

  • Not having a fictitious or benami identity.
  • Not having been prosecuted or convicted for activities aimed at religious conversion or creating communal tension.
  • Not misutilizing funds or engaging in activities against the interests of India.
  • Not contravening FCRA provisions.
  • Not being prohibited from accepting foreign contributions.
  • Ensuring that foreign contributions do not adversely affect various aspects, such as India's sovereignty, security, public interest, and more.
  • Demonstrating reasonable activity in the chosen field for the benefit of society.

It is essential for individuals and organizations in India to understand these regulations when dealing with foreign contributions to ensure compliance with the FCRA and avoid legal consequences.

FCRA Registration






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