What is the Foreign Contribution Regulation Act (FCRA), 2010?

The FCRA is an Act of the Indian Parliament designed to regulate foreign contributions or donations to individuals, associations, and NGOs in India.

Who administers the FCRA?

The Ministry of Home Affairs (MHA) is responsible for administering the FCRA.

What qualifies as 'foreign contribution' under the FCRA?

'Foreign contribution' includes donations, delivery, or transfers from foreign sources of currency, securities, or certain articles above a set value.

Are contributions from NRIs considered foreign contributions?

No, contributions made by NRIs from their personal savings through regular banking channels are not treated as foreign contributions.

Who can receive foreign contributions under the FCRA?

Individuals, associations, Hindu Undivided Families, and Section 8 companies with specific social, cultural, educational, or religious programs can receive foreign contributions under the FCRA.

What is the validity period for FCRA registration?

The FCRA registration is initially valid for five years and can be renewed upon compliance with the Act's requirements.

What are the spending limits on foreign contributions under FCRA?

Under the FCRA, not more than 20% of foreign contributions received in a financial year can be used for administrative expenses.

How must foreign contributions be received?

Foreign contributions must be received in a designated bank account opened with the State Bank of India, New Delhi, as per FCRA requirements.

What happens if an NGO's FCRA registration is canceled?

If an NGO's FCRA registration is canceled, it cannot reapply for registration for three years.

Can the government suspend an NGO's FCRA registration?

Yes, the government can suspend an NGO's registration for up to 180 days while an inquiry is conducted.

Can FCRA orders be challenged?

Yes, orders issued by the government under the FCRA can be challenged in the High Court.

What happens if an NGO does not renew its FCRA registration?

If an NGO fails to renew its registration, it loses its eligibility to receive foreign contributions.

Are there restrictions on how foreign contributions can be used?

Yes, foreign contributions must be used only for the purpose for which they were received and cannot be used for administrative expenses beyond the prescribed limit.

Can FCRA registration be canceled for providing false information?

Yes, FCRA registration can be canceled if an inquiry finds false information in the application.

Can foreign contributions be transferred to another NGO?

No, FCRA does not permit foreign contributions to be transferred to another unregistered organization.

Are donations from foreign relatives considered foreign contributions?

Yes, donations from foreign relatives are considered foreign contributions under the FCRA and need compliance with the Act's provisions.

How does FCRA define a foreign source?

A 'foreign source' includes foreign individuals, companies, governments, and other entities located outside India.

Is prior approval required for each foreign contribution?

NGOs must either have FCRA registration or obtain prior permission from the government for each foreign contribution.

What is the Foreign Contribution (Regulation) Act, 2010?

The Union Ministry of Home Affairs has, for the first time, clearly specified the reasons for rejecting clearance under the Foreign Contribution Regulation Act (FCRA), which is required to receive foreign funds.

Overview of the Foreign Contribution (Regulation) Act, 2010 (FCRA):

The FCRA is legislation passed by the Indian Parliament to regulate foreign contributions, particularly monetary donations, provided by foreign sources to individuals, associations, and NGOs within India. Initially enacted in 1976, it was extensively amended in 2010, and is overseen by the Ministry of Home Affairs (MHA).

Under the FCRA, “foreign contribution” refers to any donation, delivery, or transfer from a foreign source of:

Any article (excluding gifts valued under one lakh rupees for personal use),
Any currency (Indian or foreign),
Any securities, including foreign securities.

This also covers:

Contributions from individuals who themselves received funds from foreign sources,
Interest earned on foreign funds held in bank accounts.

The Act imposes requirements for registration and spending restrictions on Indian nonprofit organizations receiving foreign contributions. Its primary goal is to prevent foreign entities from unduly influencing India’s electoral, social, political, economic, or religious environment in ways that may harm public interest. Contributions by Indian citizens living abroad (such as NRIs) through their personal savings and regular banking channels are not classified as foreign contributions.

Eligibility to Receive Foreign Contributions:
Individuals or entities can receive foreign contributions if:

They have a specific cultural, economic, educational, religious, or social program,
They have FCRA registration or prior approval from the Central Government.

Eligible recipients include:

Individuals,
Hindu Undivided Families (HUFs),
Associations,
Companies registered under Section 8 of the Companies Act, 2013.

Foreign contributions must only be used for the purposes for which they were received, with a cap of 20% of funds allocated for administrative expenses per financial year.

FCRA also mandates NGOs to open a designated bank account in the State Bank of India, Delhi, for receiving foreign funds. All associations, groups, and NGOs wishing to receive foreign contributions must register under the FCRA. Registrants must be genuine (not fictitious or benami) and must not have been involved in forced or inducement-based religious conversions. Registration is valid for five years, with renewals available if the NGO meets compliance requirements.

Registered entities can use foreign contributions for social, educational, religious, economic, and cultural projects. However, registration can be canceled if an inquiry reveals false statements in the application, and canceled NGOs cannot reapply for three years. The ministry may also suspend an NGO’s registration for up to 180 days during an investigation, with the authority to freeze its funds. Government orders under the FCRA are subject to appeal in the High Court.

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