Guide to FCRA Registration for NGOs in India

FCRA Registration:

Before receiving any foreign contribution or donation from foreign sources, any individual, association, or company in India must obtain registration from the Central Government under Section 11 of the Foreign Contribution (Regulation) Act, 2010 (FCRA). If registration is not secured, the person or entity can still accept foreign contributions, but only with prior permission from the Central Government. The FCRA registration process is managed by the Ministry of Home Affairs, Government of India.

What is FCRA?

FCRA full form stands for the Foreign Contributions Regulation Act. This legislation oversees the acceptance of foreign funds by organizations in India. Under FCRA, any Indian entity must register with the appropriate State Department before receiving financial contributions from abroad. Established in 1976, the Foreign Contributions Regulation Act was enacted to regulate the inflow of foreign donations to NGOs and charitable organizations, ensuring that such funds are used appropriately and transparently within the country.

What is FCRA registration?

Foreign Contribution Regulation Act (FCRA Act) registration is a legal requirement for individuals, associations or companies in India that wish to receive foreign donations or contributions.

Normal Registration:

• This applies to organizations that have been operational for at least three years and have a proven track record of societal contributions.
• The organization must have spent at least Rs.10 lakhs over the past three years, excluding administrative costs. It should be registered under an Indian statute, such as the Societies Registration Act of 1860 or the Indian Trusts Act of 1882.

Prior Permission for FCRA New Registration:

• Designed for newly established organizations that may not meet the three-year operational requirement.
• The organization must have a specific project and a commitment from a foreign donor regarding the purpose and amount of the donation.
• Prior permission is granted on a case-by-case basis, depending on the nature of the project and donor commitment.

Benefits of Registering under the FCRA Act:

Advantages of acquiring FCRA registration include:

• Ability to Receive Foreign Donations: FCRA registration enables organizations to receive foreign donations for specific cultural, economic, educational, religious, or social programs without government restrictions.
• Ensures Transparency: FCRA act registration and obtaining an FCRA license promotes greater transparency by ensuring that NGOs and other trusts involved in social causes properly disclose how foreign funds are raised and spent.
• Legal Protection and Tax Benefits: Organizations registered under FCRA receive government support, including tax exemptions on income, capital gains, and donations, providing significant legal and financial protection.
• Support for Social Workers: FCRA status of registration aids social workers by allowing them to identify and analyze the sources of foreign funds received by their clients, offering more freedom for organizations working towards societal welfare.
• Prevention of Fund Misuse: The FCRA registration system helps the government prevent the misuse of foreign donations, ensuring that funds are used for their intended purposes and in compliance with regulations.

Eligibility Criteria for FCRA Registration:

To be eligible for FCRA Act registration, an association must meet the following requirements:

Legal Registration: The association should be registered under an existing statute such as:

• Societies Registration Act, 1860
• Indian Trusts Act, 1882
• Section 8 of the Companies Act, 2013 (previously Section 25 of the Companies Act, 1956).
• Minimum Operational History: The organization must have been in operation for at least three years and engaged in activities benefiting society. The total expenditure in these three years should amount to at least Rs. 10 lakhs, excluding administrative costs.
• Capital Assets Usage: If the organization has invested in capital assets (like land, buildings, or vehicles), the Chief Functionary must provide an undertaking stating that these assets will only be used for FCRA-related activities.

These are the eligibility criteria for securing FCRA registration and an FCRA license.

Eligibility for FCRA Prior Permission:

For newly formed organizations seeking prior permission to receive foreign contributions, the following conditions apply:

Legal Registration: The association should be registered under an existing statute, such as:

• Societies Registration Act, 1860
• Indian Trusts Act, 1882
• Section 8 of the Companies Act, 2013.

Donor Commitment: A letter from the donor specifying the amount and purpose of the foreign contribution must be submitted.

Common Members Between Donor and Recipient: If there are common members between the Indian recipient and the foreign donor organization:

• The Chief Functionary of the recipient organization cannot be part of the donor organization.
• At least 75% of the office-bearers of the Indian organization must not be members or employees of the foreign donor organization.
• For individual donors, the same conditions apply to ensure the separation of roles and avoid conflicts of interest.

What Constitutes Foreign Contribution?

Foreign contributions include:

• Any article (except personal gifts below Rs. 25,000).
• Any currency, whether Indian or foreign.
• Foreign securities are defined by the Securities Contracts (Regulation) Act, 1956, or the Foreign Exchange Management Act, 1999.

Interest accrued on foreign contributions or income derived from foreign contributions also counts as foreign contributions.

Who is Considered a Foreign Source?

A foreign source includes:

• Any foreign government or its agency.
• Any international agency (excluding the UN, World Bank, IMF, etc.).
• Foreign companies and multinational corporations.
• Foreign citizens, trusts, foundations, and associations.

Conditions for Registration or Prior Permission:

• The organization or individual applying must not be fictitious or benami.
• They should not have been involved in forced religious conversions, communal disharmony, or misuse of funds.
• The applicant should not advocate violent methods or engage in sedition.
• The foreign contribution must not jeopardize India’s sovereignty, integrity, security, public interest, or elections.
• The contribution should not incite an offence or endanger anyone’s safety.

Additionally, applicants should have a reasonable track record of contributing to society and must have prepared a well-structured project if applying for prior permission.

Mandatory Requirements for NGO FCRA Registration:

To successfully apply for NGO FCRA registration, an organization must meet the following mandatory requirements:

• Legal Registration: The NGO must be registered under an applicable statute such as the Societies Registration Act, 1860, Indian Trusts Act, 1882, or Section 8 of the Companies Act, 2013.
• NGO Darpan ID: The NGO must be registered on the NITI Aayog portal and obtain an NGO Darpan ID, which is required to complete the FCRA registration forms.
• FCRA Bank Account: The organization must open a dedicated FCRA bank account. This account is exclusively for receiving foreign contributions.
• Aadhaar for Key Officials: The Aadhaar number of all key office bearers must be submitted with the application. For foreign members managing the NGO in India, a passport or OCI card is required.

FCRA Registration Documents Required:

To register your NGO under the Foreign Contribution Regulation Act (FCRA Act), different sets of documents are required depending on whether you are applying for Normal FCRA Registration or Prior Permission FCRA Registration.

Normal FCRA Registration:

• Registration Certificate of Association
• Proof of your NGO’s registration under applicable acts (Societies Registration Act, Trust Act, etc.).
• Memorandum of Association/Trust Deed
• Legal documents outlining the objectives, rules, and structure of the NGO. Audited Financial Statements for the Last 3 Years
• Financial reports certified by a qualified Chartered Accountant to show the organization’s financial health and accountability
• Activity Report for the Last 3 Years
• A summary of the NGO’s activities and achievements in the past three years.
• NGO Darpan ID from NITI Aayog Portal
• The NGO must be registered on the NITI Aayog portal and obtain a Darpan ID.
• Aadhaar Card of All Office Bearers
• Aadhaar numbers of the key officials in the organization

Prior Permission FCRA Registration:

• Registration Certificate of Association
• Required proof of the NGO’s registration
• Memorandum of Association/Trust Deed
• A formal document outlining the objectives and structure of the NGO.
• NGO Darpan ID from NITI Aayog Portal
• Mandatory registration and ID from the NITI Aayog portal
• Aadhaar Card of All Office Bearers
• Aadhaar numbers of key officials involved in the organization.
• Commitment Letter from Donor Organization and Agreement
• A letter specifying the donor’s commitment to funding the project, along with the agreement details
• Project Report
• Detailed report of the project for which foreign contributions (FC) will be received

Renewal of FCRA Registration:

FCRA registration is valid for five years, and organizations must apply for FCRA renewal before its expiry to continue receiving foreign contributions. The FCRA renewal process is overseen by the Ministry of Home Affairs (MHA), and it ensures that the organization remains compliant with FCRA Act regulations. Ensure that the FCRA renewal status is tracked to determine whether the validity is extended or not.

FCRA Online Registration Process: Step-by-Step Guide:

The FCRA registration process can be complex, but by following the steps carefully, you can successfully register your NGO to receive foreign contributions. Here is a detailed step-by-step guide for the FCRA online registration process:

• Visit the FCRA Portal: Go to the FCRA online portal provided by the Ministry of Home Affairs (MHA). The official FCRA website is where all registration procedures are initiated.
• Create a Login ID: On the portal, click on “Sign Up” to create a login ID and password. Once your account is created, a confirmation message will appear. Log in to the FCRA portal using your newly created login ID and password.
• FCRA online application for registration: After logging in, choose the relevant registration option from the dropdown list under “I am applying for.” Select from:
  • FC-3A for FCRA Registration.
  • FC-3B for Prior Permission Registration.
  • FC-3C for FCRA Renewal.
  • FC-4 for FCRA Annual Return Filing.
• Fill Out the FC-3 Form: Based on your selected type of registration (FC-3A, FC-3B, FC-3C), fill out the corresponding FC-3 form. Provide the necessary information, including association details, Darpan ID (if available), registration number, and nature of the association.
• Enter Association and Executive Committee Details: Fill in details about the association, such as:
  • Association Address
  • Registration Number
  • Registration Date
  • Main Object and Nature of the Association

Next, enter details of the Executive Committee, including key functionaries. You can add, delete, or edit these details through the “Add details of Key Functionary” option.

• Provide Bank Details: Enter the required FCRA bank account details, including:
  • Bank Name
  • Account Number
  • IFSC Code
  • Bank Address

The FCRA account must be opened for receiving foreign donations.

• Upload Required Documents: Upload all the necessary documents in PDF format as per the size and format guidelines provided on the MHA portal.
• Finalize the Application: Enter the place and date in the designated fields. Review the details carefully and click the Final Submission button to submit your application.
• Make Payment: After submission, complete the registration by making the required online payment. The government fees will vary depending on the type of FCRA registration (normal, prior permission, or renewal). Once the payment is made, no further changes can be made to the form.
• Confirmation and Registration: Once the payment is processed, your application is considered submitted. You will receive a confirmation, and the FCRA Act registration process is complete. You can now track the status of your application on the FCRA portal. Also, you can track the FCRA renewal status if you are undergoing the FCRA renewal process.

Filing Annual and Quarterly Returns for NGOs Receiving Foreign Donations:

If your NGO or trust is registered and receives foreign donations, you are required to file an annual return with the Ministry of Home Affairs. Additionally, if your total foreign receipts exceed Rs. 1 crore in a financial year, you must also file a quarterly return. The annual return must cover the fiscal year (April 1st – March 31st) and be submitted within nine months after the fiscal year ends, by December 31st at the latest. The return must include a certified balance sheet and statement of receipts and payments from a Chartered Accountant. All returns must be filed using Form FC-4. The FCRA online portal provides a convenient way to submit these returns.

FCRA Bank Account:

An FCRA Bank Account is a dedicated account required for all foreign contributions received by organizations under the Foreign Contribution Regulation Act (FCRA).  It is functioning based on the FCRA account RBI guidelines. The process of opening an FCRA account typically takes seven days from the application date.

Existing FCRA-registered organizations are prohibited from receiving foreign donations in any account other than the designated FCRA account. New applicants, however, are required to open their FCRA account after receiving their FCRA certificate from the Ministry of Home Affairs.

This FCRA account can only be used to receive foreign contributions. No domestic funds or other non-foreign transactions are allowed in this account.

Government warns NGOs of penal action for receiving foreign funds without FCRA registration:

The Union Home Ministry on Tuesday (January 21, 2025) warned non-Government organizations (NGOs) of penal action, if they receive foreign funds without registration under the Foreigners Contribution Regulation Act, 2010 (FCRA). FCRA registration is mandatory to receive foreign donations.

MHA Approves FCRA for Tibetan NGOs: Key Details:

The Union Ministry of Home Affairs (MHA) has granted a Foreign Contribution Regulation Act (FCRA) registration to ‘His Holiness the Dalai Lama Charitable Trust’ for “religious” purposes, among others. FCRA registration is a mandatory requirement to receive foreign funds.

Source : https://www.indiafilings.com/learn/fcra-registration-for-trusts-and-ngos/