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Overview

In India, FCRA(Foreign Contribution (Regulation) Act, 2010) regulates foreign funding for approved activities. This includes cultural, economic, educational, religious, or social programs. Furthermore, FCRA Registration is mandatory for NGOs, Section 8 Company & Non-Profit Organisations if they wish to receive foreign donations.

What is FCRA Registration?

FCRA registration is a compulsory certification process for any entity intending to receive foreign funds for specified purposes such as cultural, economic, educational, religious, or social programs.

Types of FCRA Registration

Prior Permission Certificate (PPC) The FCRA’s Prior Permission Certificate is ideal for newly established organisations seeking to receive foreign contributions. Under this approach, only a specified amount from a particular donor is permitted for specific activities or projects.

To get this kind of FCRA Registration, you must satisfy the following prerequisites:

1. The NGO or organization must have been operational for at least one year.

2. The applicant is required to furnish a list of foreign donors along with their credentials, including addresses, designations, and the causes they are supporting.

3. The applicant entity should disclose the precise amount of funds received from foreign sources along with the registration form.

Permanent Registration Certificate (PRC)

Under this method, a permanent FCRA registration certificate is issued which is valid for up to five years. To obtain this certificate, organisations must fulfil the following criteria:

1. The non-governmental organisation(NGO) must have been actively operating for a minimum of three years.

2. Submission of annual returns for the preceding three years, accompanied by an audit report from a registered chartered accountant, is mandatory.

3. Additional documentation such as PAN cards, by-laws, Memorandum of Association (MOA), and Articles of Association (AOA) must be provided for registration purposes.

Eligibility for FCRA Registration

It's preferable for FCRA applicants to be Trusts, Societies, or Section 8 Companies.

The applicant must have been in existence for at least three years when applying for FCRA registration and should not have received foreign contributions without government approval prior to that.

The organisation should have spent at least Rs.10,00,000 over the last three years on its objectives, excluding administrative expenses, and must provide audited Income & Expenditure statements for verification.

Newly registered entities seeking foreign contributions can apply for approval for specific activities, purposes, and sources through the Prior Permission (PP) method with the Ministry of Home Affairs.

Who needs to get FCRA Registration?

1. Organizations

Organizations registered under specific Indian laws like:

- Societies Registration Act, 1860

- Indian Trusts Act, 1882

- Section 8 of Companies Act, 2013

- Societies or associations not registered under the above laws but granted specific FCRA permission for certain activities.

2. Individuals

Individuals can get FCRA Registration for specific activities permitted under the Act, such as:

- Engaging in research or academic work related to foreign contributions.

- Undertaking cultural exchange programs.

- Providing humanitarian assistance in natural disasters or emergencies.

3. Exemptions

Certain entities exempt from FCRA registration include

- Educational institutions receiving contributions for academic purposes.

- Hospitals receiving donations for medical treatment.

- Individuals receiving scholarships or stipends from foreign sources.

Benefits of FCRA Registration

Legal Recognition and Credibility

FCRA registration provides legal status and credibility domestically and internationally, ensuring compliance with national legislation for accepting overseas donations.

Access to Foreign Funding

FCRA-registered organizations can engage with foreign individuals, agencies, and foundations, expanding funding opportunities for organizational growth and operations.

Increased Donor Trust

FCRA registration enhances confidence among donors, both domestic and foreign, by demonstrating a commitment to regulatory compliance and responsible fund management.

Tax Exemptions

FCRA-registered organizations are eligible for tax benefits, including exemptions under the Income Tax Act, allowing for more efficient allocation of resources towards organizational goals.

Long-Term Sustainability

FCRA registration strengthens the long-term sustainability of non-profit organizations, particularly in situations of limited domestic funding, providing stability and resilience to operations.

Document Requirement for FCRA Registration

1. Form FC-3 for FCRA registration process.

2. Active account in State Bank of India (SBI).

3. Self-certified copy of organization's registration certificate or Trust deed.

4. Self-certified copy of relevant pages from Memorandum of Association or Article of Association outlining organization's aims and objectives.

5. Activity report outlining organization's activities over past three years.

6. Copies of audited financial statements for preceding three years.

7. Financial statements cover assets and liabilities, receipts and payments, and income and expenditures.

8. Documents on expenditures incurred towards organization's objectives and administrative costs.

Stepwise Process for FCRA Registration

• Step 1

  Contact our experts at 8881-069-069 or write to us at info@e-startupindia.com to understand your eligibility and application process of FCRA Registration process.

  Step 2

  Our experts help you in document preparation and submit the FCRA Registration application on your behalf without you having to worry about anything.

  Step 3

  After successful approval from the government, you receive FCRA Registration Certificate delivered to your email.

Renewal and Validity of FCRA Registration

The permanent FCRA Registration certificate is valid for 5 years. After completion of five years, you will need to submit an FCRA Registration Certification Renewal application. If your renewal application is not approved or submitted, you will not be able to receive or utilise funding from foreign sources.

Post FCRA Registration Compliances that you must follow

. Annual Reporting: To stay compliant, you'll need to submit an annual return by December 31st each year. This can be done electronically using Form FC-4, along with a certified statement of your receipts, payments, and year-end balance sheet (prepared by a Chartered Accountant).

. Record Keeping: It's important to maintain accurate and up-to-date records and financial accounts. This helps ensure everything is clear and transparent.

. Nil Return Requirement: Even if you haven't received or used any foreign contributions during the year, you're still required to submit a "nil return" through Form FC-4. This simply confirms there's no activity to report.

Penalties for Violation of FCRA Compliances

Following FCRA regulations is mandatory. Non-compliance can lead to serious penalties, including imprisonment or fines (or both).