FCRA (Foreign Contribution (Regulation) Act ) 2010

FCRA (Foreign Contribution (Regulation) Act ) 2010

1. FCRA (Foreign Contribution (Regulation) Act ) 2010 ( Previously 1976 ) (A basic requirement for entities receiving   contribution from Foreign Source) NGOs under FCRA act Presented By: Dr. Renuka Asagi Mr. Muthuraj K

2. Preamble of the Act This Act may be called the Foreign Contribution (Regulation) Act, 2010. It extends to the whole of India, and it shall also apply to :— citizens of India outside India. associate branches or subsidiaries, outside India, of companies or bodies corporate, registered or incorporated in India.

3. Purpose The primary purpose of regulating the inflow of foreign contributions and ensuring that the received foreign contributions are not utilized for purposes other than those specified under the legislation. To regulate the acceptance and utilization of foreign contribution or foreign hospitality by certain individuals or associations or companies. To prohibit acceptance and utilization of foreign contribution or foreign hospitality for any activities detrimental to the national interest

4. What is Foreign Contribution “Foreign Contribution” is defined by FCRA as a donation, delivery or transfer made by a foreign source of: ( i ) any article (unless given to an individual for personal use), the value of which should not to exceed Rs. 25,000/- (ii) currency, foreign or Indian, or (iii) foreign securities including all foreign Debentures, Bonds, Shares, Stocks and Similar Instruments Of Credit. Any income or interest generated from such contributions is also treated as a foreign contribution under the FCRA.

5. Entities to whom FCRA, 2010 applicable? As per Section 2(m) of FCRA, 2010 provisions of the Act shall be applicable on the following “persons” receiving Foreign Contribution from the Foreign Source :- An Individual Hindu Undivided Family An Association A Company Registered Under Section 25 Of The Companies Act, 1956 (now, section 8 of the Companies Act, 2013) The organizations having a definite cultural, economic, educational, religious or social programme are entitled to accept foreign contributions under the FCRA.

6. Introduction  NGOs play a critical role in the progression of the economically/ physically weaker sections of the society. Also, usually, operations of NGOs are entirely dependent on donations from both domestic and foreign sources. However, NGOs often drift along an indistinct line while gaining funds and capital. The source of these funds can range from Foreign funding, charity, government-funded campaigns, donations as well as corporate social responsibility. While locally-sourced funds are not under extreme scrutiny, foreign funding is highly regulated, owing to concerns about the source, and ultimate goals, of the funds.

7. To that end, the Foreign Contribution (Regulation) Act (FCRA) monitors foreign funding for NGOs. Nearly 30,000 Indian NGOs are enlisted with the FCRA to procure foreign money. understand how to generate foreign funding keeping in mind the provisions of the FCRA Under the Act, all societies, companies, associations and NGOs have to fulfill definite criteria to be eligible for foreign funds. Moreover, registration with the Central Government is also crucial. However, there is a particular provision to take prior permission based on each case.

8. Eligibility for grant of registration  The NGO must be registered under an existing law like the Companies Act, the Indian Trusts Act or the Societies Registration Act etc. The NGO must have been in operation for three years. The NGO must not have an already registered parent society under FCRA. The NGO must not have a foreigner on the board. Besides from being in operation for at least three years , the NGO must submit evidence of projects undertaken in the specified field of activity. The NGO is also required to spend Rs. 10,00,000 or more during the last three years on its aims and objectives, excluding the expenditure on administration

9. FCRA registration Foreign Contribution Regulation Act ( FCRA ) is an act, passed by the Indian Parliament, “to consolidate the law to regulate the acceptance and utilization of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilization of foreign contribution. Charitable Trusts, Societies, Section 8 Company that receive foreign contribution or donation from foreign sources are required to obtain  registration  under Section 6(1) of Foreign Contribution Regulation Act, 2010. Such a  registration  under the Foreign Contribution Regulation Act, 2010 is called a  FCRA registration

10. An application for registration of an organization for acceptance of foreign contribution shall be made electronically on-line in Form FC-3, and shall be followed by forwarding the hard copy of the on-line application duly signed by the Chief Functionary of the NGO together with the necessary documents including the following. Form FC-3 duly filled in triplicate. Audited statement of accounts of past three years. Annual Report specifying activities of past three years. If the NGO is a registered Trust or Society a certified copy of the registration certificate. Registration process for an NGO under the FCRA (https://fcraonline.nic.in/home/index.aspx)

11. Copy of the Memorandum of Association and/or the Articles of Association as applicable. List of Main objects and definite programmes for which the contribution is to be accepted / utilized. Details of names and addresses of the members of the Executive Committee/Governing Council etc. of the NGO. Copy of any (if any) prior permission granted to the organization. Copy of resolution of Governing Body of the organization, authorizing the registration under FCRA. Copy of Power of Attorney or the resolution of Governing Body by which the Chief Functionary is authorized to submit FC-3. List of present members of the Governing Body of the organization and the office bearers.

12. Copy of any Journal or other publication of the organization. If the association is having any parent or sister or subsidiary organization which is registered under the FCRA then the registration number along with Ministry of Home Affairs file number should be mentioned. If the association has submitted any application earlier then its reference number should be mentioned. If the association has received any foreign contribution with or without the prior approval of the Central Government, then the detail should be given.

13. Details of Bank along through which the foreign contribution shall (intended to) be received. Copy of certificates of exemption or registration issued by the Income Tax Department u/s80G and 12A. To Secretary to the Government of India, Ministry of Home Affairs, New Delhi.

14. Concept of ‘prior permission’ under FCRA An association or an organization can receive foreign contribution even without registration with prior permission from the FCRA department. Foreign funds and materials can only be received under two circumstances: A) the organization has obtained permanent registration from the FCRA department. B) the association or the organization obtains prior permission from the FCRA department on case to case basis.

15. Procedure for obtaining ‘prior permission’ The Organization is required to apply in Form FC-4 for prior permission to the FCRA department along with the documents mentioned below for registration. Certificate of Recommendation, (1) Collector of District (2) Department of the State Government (3) Ministry or Department of the Government of India And all required documents for registration. whichever is available.

16. REGISTRATION FEE The fee for obtaining registration would be Rs. 2000/- and for prior permission Rs. 1000/-

17. Renewal FCRA registration Every five years NGOs have to renewal FCRA license by providing all details.( including Annual returns, administrative chares, donors list and over all activities done through foreign contributions) It is applicable for prior registration organization also.

18. Thank You.