What is foreign contribution?
As defined in Section 2(1)(h) of FCRA, 2010, “foreign contribution” means the donation, delivery or transfer made by any foreign source, ─
(i) of any article, not being an article given to a person as a gift for his personal use, if the market value, in India, of such article, on the date of such gift is not more than such sum as may be specified from time to time by the Central Government by rules made by it in this behalf;
(ii) of any currency, whether Indian or foreign;
(iii) of any security as defined in clause (h) of section 2 of the Securities Contracts(Regulation) Act, 1956 and includes any foreign security as defined in clause (o) of Section 2 of the Foreign Exchange Management Act, 1999.
A donation, delivery, or transfer of any article, currency, or foreign security referred to in this clause by any person who has received it from any foreign source, either directly or through one or more persons, is also deemed to be a foreign contribution for the purposes of this clause.
Interest earned on a foreign contribution deposited in one of the banks listed in Section 17’s sub-section (1), as well as any other income derived from the foreign contribution or interest earned on it, are deemed to be foreign contributions for the purposes of this clause.
Any amount received by an individual in India from a foreign source as a fee (including fees charged by an educational institution in India from foreign students) or as a cost in lieu of goods or services rendered by such individual in the ordinary course of his business, trade, or commerce, whether within India or outside India, or any contribution received from an agent or a foreign source towards such fee or cost shall be excluded from the definition of foreign remittance.
Is it possible to receive and use foreign contributions from multiple bank accounts?
No funds other than foreign contributions may be deposited in a Bank’s exclusive single FC account, as specified in the order for FCRA registration or prior permission granted by MHA, and must be kept separate by the associations. However, after the foreign contribution has been received, one or more accounts in one or more banks may be opened for the purpose of utilizing it, provided that no funds other than the foreign contribution are received or deposited in such account or accounts, and in all such cases, intimation on plain paper must be furnished to MHA within 15 days of the account being opened.
What are the eligibility criteria for grant of registration?
For grant of registration under FCRA, 2010, the association should:
(i) be registered under the Societies Registration Act, 1860 or the Indian Trusts Act, 1882 or section 25 of the Companies Act, 1956 etc;
(ii) normally be in existence for at least three years and has undertaken reasonable activity in its chosen field for the benefit of the society for which the foreign contribution is proposed to be
utilized. For this purpose, the association should have spent at least Rs.10,00,000/- over the last three years on its activities, excluding administrative expenditure. Statements of Income &
Expenditure, duly audited by Chartered Accountant, for last three years are to be submitted to substantiate that it meets the financial parameter.
What are the eligibility criteria for grant of prior permission?
An organization in its early stages of development is not eligible for registration. The FCRA, 2010, allows such organizations to apply for prior permission. The receipt of a specific amount from a specific donor for the purpose of carrying out specific activities/projects requires prior permission. The organization should do the following to achieve this goal:
- be registered under the Societies Registration Act of 1860, the Indian Trusts Act of 1882, or section 25 of the Companies Act of 1956, among other statutes;
- submit a letter from the donor stating the amount of the foreign contribution and the purpose for which it is intended to be given; and
- submit a copy of a reasonable project for the benefit of the society that the foreign contribution will be used for.
What are the requirements for obtaining registration and prior permission?
The following are the conditions for granting registration and prior permission under Section 12 (4) of the FCRA, 2010:
The ‘person’ who submits an application for registration or prior permission is referred to as the ‘applicant.’
- Is neither fictitious nor benevolent;
- Has not been charged with or convicted of engaging in activities aimed at converting people from one religious faith to another through coercion or force, either directly or indirectly;
- Has not been charged or convicted of inciting communal strife or disharmony in any district or elsewhere in the country;
- Has not been found guilty of misappropriation or diversion of funds;
- Is not involved in or likely to become involved in the propagation of sedition or the use of violent methods to achieve its objectives;
- Is unlikely to use the foreign contribution for personal gain or to divert it to nefarious ends;
- Has not disobeyed any of the Act’s provisions;
- Has not been barred from accepting contributions from outside the country;
- Because the person is an individual, he has never been convicted of any crime under any law currently in effect, nor is he facing any criminal charges.
- Any of its directors or office bearers, if not an individual, has not been convicted under any law currently in force, nor has any prosecution for any offense been filed against him.
The association/acceptance of a foreign contribution is unlikely to have a negative impact.
- India’s sovereignty and integrity; or
- the state’s national security, strategic, scientific, or economic interests; or
- the general welfare; or
- any Legislature’s election freedom or fairness; or
- any friendly relationship with a foreign country; or
- Religious, racial, social, linguistic, and regional groups, castes, or communities live in peace.
Acceptance of contributions from other countries-
- Shall not be used to incite criminal activity;
- Shall not put anyone’s life or physical safety in jeopardy.