Must Knows

FCRA: Meaning, eligibility and application procedure

[ecis2016.org] Foreign donations are regulated by the FCRA to ensure they do not adversely affect internal security.

What is FCRA?

FCRA is the Foreign Contribution (Regulation) Amendment Act, 2020. Foreign donations are regulated by the FCRA to ensure they do not adversely affect internal security. In 2010, it was amended by a slew of new measures to regulate foreign donations. It was originally passed in 1976. All associations, groups, and NGOs receiving foreign donations are subject to the FCRA. All NGOs of this type must be registered under the FCRA. 

Initial registrations are valid for five years and can be renewed if they comply with all the requirements. Foreign contributions can be received by registered associations for social, educational, religious, economic and cultural purposes. In the same way as Income Tax returns, annual returns are required. 

A rule was notified in 2015 by the ministry of home affairs that required NGOs to provide an undertaking that accepting foreign funds would not prejudicially affect the sovereignty or integrity of India or negatively impact friendly relations with foreign states and would not disrupt communal harmony. In addition, all such nonprofits should operate accounts with either nationalised or private banks with core banking facilities to allow security agencies to access real-time information.

What is the objective of FCRA?

The Foreign Contribution Regulation Act was enacted with a view to: –

  • Oblige companies or organisations to regulate the acceptance and utilisation of foreign contributions.
  • To prevent the acceptance and utilisation of foreign hospitality or foreign contributions for any activities detrimental to national interests and anything related thereto or incidental thereto.

What is the eligibility criteria for FCRA?

Normal registration

To be eligible for normal registration, there are a few prerequisites:-

  • Applicants must be registered under the Societies Registration Act, 1860, or the Indian Trusts Act, 1882, or registered as Section 8 companies, as per the Companies Act, 2013, or any other applicable law.
  • The organisation must have undertaken activities that contributed to the benefit of society in its chosen field.
  • An organisation must have spent at least Rs 10 lakh in the last three years to achieve its objectives (excluding administrative expenses).
  • A copy of the organisation’s audited financial statements for the last three years from a qualified Chartered Accountant is required.
  • Newly registered entities can apply for a Prior Permission (PP) from the Ministry of Home Affairs if they wish to receive foreign contributions for a specific purpose, specific activity, and from a specific source.

Prior Permission Registration

Prior Permission is the ideal route for organisations that are newly registered and wish to receive foreign contributions. A specific amount is granted to carry out specific activities/projects after receiving a specific amount from a specific donor. –

The association must comply with the following:

  • The company must be registered under the Societies Registration Act, 1860 or the Indian Trusts Act, 1882, or registered as a Section 8 Company under the Companies Act, 2013 or any other applicable law.
  • The donor must submit a letter of commitment to the Ministry of Home Affairs that indicates:
    • Amount of contribution given
    • The purpose for it is supposed to be given.
  • In cases where the Indian recipient organisation and the foreign donor organisation have common members, the following conditions must be met:
    • A chief functionary of the Indian organisation cannot be a member of the donor organisation.
    • A minimum of 51% of the members/office-bearers of the governing body of the Indian recipient organisation should not be employees/members of the foreign donor organisation.
    • In cases where the foreign donor is an individual:
      • The Indian organisation cannot have him as its Chief Functionary.
      • A minimum of 51% of the office bearers/members of the governing body of the recipient organisation should not be family members or close relatives of the donor.

Documents required for FCRA application

For registration

  • Jpg file of the chief functionary signature’s
  • Self-certified copy of registration certificate of the association, relevant pages of MoA (Memorandum of Association) or AoA (Articles of Association)
  •  Last 3 years’ activity reports
  • Copies of audited financial statements of the last 3 years

For prior permission

  • Jpg file of the chief functionary signature’s
  • Self-certified copy of registration certificate of the association, relevant pages of MoA (Memorandum of Association) or AoA (Articles of Association)
  • Signed commitment letter from donor.
  • A certified copy from the Registrar of Newspapers

Fees for FCRA application

Rs 2,000 for registration and Rs 1,000 for Prior Permission. It can be paid online.

What is the FCRA validity and renewal time limit?

FCRA registrations are valid for five years after the grant. However, it must be noted that a renewal application must be made six months before the expiration date of the FCRA registration.

What is the FCRA application procedure?

To apply for registration under FCRA, the steps are as follows: –

  •  As a first step, go to the online portal of the FCRA.
  • Depending on the case, Form FC – 3A (Application for FCRA Registration) or Form FC – 3B (Application for FCRA Prior Permission) must be selected.
  • The next step is for the web page to present the user with an online application option.
  • By clicking “Sign Up”, a username and password can be created by selecting the “Apply Online” option.
  • The applicant may log into the account after creating a username and password and seeing the associated message.
  • As soon as you are logged in, you will see a dropdown list from which FCRA Registration can be selected, then “Apply Online” must be chosen, then “Proceed Registration”.
  • The next step is to click on the FC-3 menu in the title bar to begin the registration process.
  • Upon selecting this button, the applicant is taken to the association form where the relevant details have to be filled in along with the requisite attachments: – – Darpan ID (not mandatory) – Association Address – Registration Number – Registration Date – Nature of the Association – Main object of the Association Once these details are completed along with the attachments, the submit button is chosen.
  • The next option on the menu bar is the Executive Committee. Complete the Executive Committee form to fill out the details.
  • The applicant has the option to enter/delete/edit the details of a Key Functionary under the “Add details of Key Functionary” section.
  • The “Save” button must be clicked after the Executive Committee details have been entered.
  • A bank account number, IFSC code, and bank address must also be provided, as well as the name of the bank.
  • You need to upload all the required documents in PDF format after entering the bank details.
  • The following step is to enter the location and date and select the final submission button.
  • Clicking on that particular button is the last step in making the payment online. A payment has been made and a form submitted, and no changes can be made to that form once it has been submitted. Note that no changes can be made once you submit the form.

Source: https://ecis2016.org/.
Copyright belongs to: ecis2016.org

Debora Berti

Università degli Studi di Firenze, IT

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