FCRA Registration and the Foreign Contribution Regulation Act

Overview of FCRA Registration

The Ministry of Home Affairs gives FCRA registration to Non-Profit Organizations in India. This helps them manage and monitor foreign donations received by NGOs in the country. Moreover, FCRA Full Form is Foreign Contribution Regulation Act.

Registered charities, charitable trusts, and Section 8 companies need to register under the Foreign Contribution Regulation Act (FCRA). We need this registration to accept donations from other countries. When NGOs and charity trusts register with the FCRA, it helps them receive funds from outside sources into their FCRA account.

Foreign funding agencies give money to Indian nonprofits. These nonprofits help specific groups. Their support is important and widespread.

Understanding FCRA Registration

The Ministry of Home Affairs is in charge of the FCRA Department. For an NGO, trust, or Section 8 company, FCRA registration is optional.

The government has integrated all the rules and regulations pertaining to foreign contributions and assistance that any individual, association, or business may accept. The government created the Foreign Contribution (Regulation) Act of 2010 to achieve this goal. It aimed to use e-governance for FCRA-related tasks.

The goal is to create a clear framework for people and organizations. Developers created this open system to deter any harmful actions that would go against the interests of the country.

Requirements of FCRA Registration

Two types of FCRA registrations exist. One is normal registration, and the other is prior permission registration. Different criteria exist for both types of registration. To qualify for normal registration, you need to meet a few requirements.

• You must register the application as a Section 8 company. You can do this under the Companies Act of 2013.
• You can register it under the Societies Registration Act, 1860, the Indian Trusts Act, 1882, or other applicable laws.
• Must have undertaken activities in its chosen field to help society and made fair contributions.
• Allocating a minimum of Rs. 10,000,000 in the past three years is necessary to achieve your objectives. This amount does not include administrative costs.
• Submission of audited financial statements from the past three years, verified by certified chartered accountants, is a requisite.

A new organization can use the Prior Permission (PP) method to ask the Ministry of Home Affairs for approval. The organization needs this if it wants to accept donations from other countries for a specific activity. The Prior Permission type is best for new organizations that want to receive contributions from abroad.

A donor provides this in exchange for receiving a certain amount. This money helps complete specific tasks or projects. The organization needs to:

• Send a detailed commitment letter detailing the donor's amount of payment to the Ministry of Home Affairs.
• The foreign donor organization and the Indian receiving organization must meet the following requirements when they share some members:
• The donor organization is not allowed to include the Chief Functionary of the Indian organization.
• Employees or members of the foreign donor organization cannot hold more than 51% of the governing body. They also cannot be more than 51% of the office bearers of the Indian receiving organization.
• In the case of an individual foreign contributor:
• He cannot be the chief functionary of the Indian organization.
• At least 51% of the office staff and members of the governing body should not be the donor's family

What are the advantages of FCRA registration?

The advantages of FCRA registration are mentioned below:

Accept Donations from Abroad

An association can accept foreign donations for cultural, economic, educational, religious, or social projects if it is FCRA registered. This registration removes all legal barriers.

Offer Transparency

It aims to ensure transparency in how NGOs and social trusts receive and use foreign contributions.

Provide Legal Protection

The government provides registered NGOs under the FCRA with significant support. This includes donations, capital gains, and waived income taxes.

Assists social workers

Social workers can better assess and identify where their clients' money comes from because of FCRA registration. It provides freedom to promote the well-being of society autonomy.

Prevents financial abuse

The government can stop the misuse of foreign funds with the use of FCRA registration. This helps them understand the true nature of the donations the organization has received. It also shows how organizations use these donations to achieve their goals.

FCRA Registration Documents Required

The documents listed below are necessary for FCRA registration-

• The trust deed, Formation certificate, or any other certificate must be self-attested by the entity.
• Information about Non-Profit Organizations and the PAN.
• AOA and MOA copies of the company.
• Chief Authority's impression (which will be in JPG format).
• An in-depth report covering the previous three years' activity.
• An audited version of the financial statements includes the P&L account. It also has information on income and expenses. Additionally, it contains the cash flow statement for the last three years.
• Certified accurate copies of the resolution that a nonprofit body corporate adopted after receiving permission.
• A certificate issued in accordance with Section 12 AB of the Income Tax Act.

What is the FCRA Registration Process?

The FCRA registration process is complex. It requires the applicant to have a good understanding of the entire process. The following process is followed for getting the FCRA registration:

Step 1: Go to the FCRA website

First, visit the official Website of the FCRA registration.

Step 2: Generate your Login ID and Password

Make a password and ID for your login. You must use your ID and password to access the FCRA website. Click on the new registration button to initiate the registration process of FCRA registration.

Step 3: Complete the FC-3 Form

As part of your FCRA registration, you need to fill out the FC-3 form. Please provide the correct and complete details.

Step 4: Upload Necessary Documents

Upload the necessary documents in the format specified to complete the FCRA registration process. Verify that the submitted documents meet the specifications for size listed on the MHA portal. You may cancel the application if the format is improper.

Step 5: Making a payment

Lastly, in order to register online for the FCRA, you must pay the requisite fees. Depending on the type of FCRA registration you wish to take, different government costs apply.

After everything is in order, you'll become registered under the FCRA and can receive donations from foreign countries.

FCRA Registration Fees

FCRA registration fee set by the government is 10,000 rupees. This is the cost for registering under the Foreign Contribution Regulation Act.

Annual Return Filing under FCRA

If you run a registered NGO or trust that receives donations from foreign countries, you need to submit an annual report. This report goes to the Ministry of Home Affairs. If your total income from foreign sources in a financial year is over Rs. 1 crore, you must file an FCRA return.

Each fiscal year runs from April 1 to March 31. You must file a return by December 31 or within nine months after the year ends. You need to use Form FC-4 to file the return.

It should include a statement of receipts and payments. You also need a certified balance sheet. A chartered accountant must prepare this balance sheet.

You can easily file your annual returns using the online website of FCRA. The site is simple to use and navigate. You can also pay the requisite fees online while using the same site.

Why PSR Compliance for FCRA Registration?

PSR Compliance can be your perfect partner for FCRA registration. We dedicate ourselves to making this complex process easy for you. Our team has the experience needed to help you. We have served many clients successfully.

We ensure that we complete the process on time. Our application procedure is accurate and efficient. For more details, contact us today.

Frequently Asked Questions

Q1. Is it mandatory to get FCRA registration?

Yes, getting an FCRA registration is mandatory to receive foreign donations. Section 11 of the FCRA, 2010 says that no one can collect foreign contributions. This is true unless the Act says otherwise.

To collect these contributions, a person needs to get a certificate of registration. They must also obtain prior approval from the Central Government.

Q2. Are there any consequences for not getting FCRA Registration?

Receiving foreign donations without first registering with the FCRA is an offence. If you break any rules in the Foreign Contribution Registration Act, you could face a fine. You could go to prison for up to three years, or face both penalties.

Q3. What is the validity of FCRA Registration?

The FCRA registration is valid for a limited period of five years. You must file the renewal application at least six months before the registration certificate expires.

Q4. How long does it take to obtain FCRA Registration?

This is a time taking process, and generally take around 4 to 5 months to complete.

Q5. How do I renew my FCRA registration?

The renewal application must be filed in FC-3 six months before the FCRA certificate expires, You need to pay the Rs. 10,000 Government Challan. Please submit the form and all attachments online.

Q6. How to Check FCRA Registration Status?

Simply you can check FCRA registration status, go to the Ministry of Home Affairs website. Go to the FCRA section, log in with your credentials, and check your organization's registration status.

Q7. What is FCRA registration?

FCRA registration is an approval from the Ministry of Home Affairs. It allows certain organizations to accept and use foreign donations and support.

The Foreign Contribution (Regulation) Act (FCRA) of 2010 governs this regulation. It sets rules for managing and monitoring foreign contributions. This helps ensure transparency and compliance with national interests.

Q8. Who needs an FCRA certificate?

If an organization wants foreign donations for a cultural, economic, educational, religious, or social program, it needs to get a registration certificate. You must obtain this certificate from the Central Government first.

Q9. What is the FCRA full form? 

The Full form of FCRA is the Foreign Contribution (Regulation) Act of 2010. This law controls how individuals, organizations and companies can receive and use foreign donations and hospitality. It also ensures that foreign contributions are not used for activities that could harm the national interest.