The Government of India enacted the Foreign Contribution Regulation Act (FCRA) as a crucial legislative measure to oversee the acquisition and application of foreign contributions by individuals, entities, and non-governmental organizations (NGOs) operating within the country. The FCRA Registration Process plays a pivotal role in ensuring adherence to the established guidelines, thereby promoting transparency in the receipt and utilization of foreign contributions. The FCRA Registration Process is designed to uphold India’s sovereignty and integrity, safeguarding against any potential risks associated with foreign donations. It is imperative for individuals, groups, and associations receiving foreign contributions to undergo the FCRA Registration Process, demonstrating a commitment to compliance and accountability. Failure to adhere to the FCRA Registration Procedure may result in legal consequences, underscoring the significance of a thorough understanding and adherence to the regulatory framework surrounding foreign contributions.
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Types of FCRA Registration Certificate
According to the FCRA 2010, individuals or organisations seeking FCRA Registration Certificate can choose from two options:
An NGO that has been active for a minimum of three years and has dedicated at least ₹10,00,000/- towards its goals during this period is eligible for a lasting permission. Once registered, the NGO can accept foreign contributions without the need for individual approval for each transaction.
Prior Permission (PP):
This is a singular authorization provided to an NGO, allowing it to accept a designated sum from a particular foreign donor for a specific intent. This authorization is designed for NGOs that do not meet the prerequisites for FCRA Online Registration, typically due to being recently established or not having expended ₹10,00,000/- on their objectives yet.
Securing FCRA permission is essential for the legal and transparent administration of foreign contributions entering the country, especially for organizations heavily dependent on such external funds.
Here are some key conditions associated with FCRA permission:
- The principal functionary of the Indian entity must not hold membership in the contributing entity.
- A minimum of 51% of the members and office holders in the governing body of the Indian recipient entity should not be affiliated as workers or members of the foreign contributing entity.
- In cases where the foreign contribution is from an individual, that individual is ineligible to serve as the chief functionary of the Indian organization.
- The governing body of the recipient entity should not consist of more than 51% family members and close relatives of the donor.
FCRA Registration Eligibility
In order for the association to get FCRA Online Registration, it must fulfil the following Eligibility for FCRA Registration:
- According to the guidelines for FCRA registration Certificate, the association must be registered under one of the Indian Society laws and be a non-profit organization:
a] Section 25 of the Companies Act of 1956;
b] The Indian Societies Registration Act of 1860;
c] The Indian Trust Act of 1882
- Before submitting an application for FCRA registration for NGO, the association must have been founded with a commitment to social reform in India and must have operated for three years.
- The organization must have spent at least Rs.15 lakhs on its main socially beneficial activities during the previous three fiscal years in order to be eligible for FCRA Certificate for Trust.
- To confirm that it satisfies these financial requirements, a statement of income and expenses that has been properly audited by a chartered accountant should be provided.
- At least 80% of the foreign contribution had to be put to use by the organization for its main operations. The total amount of money that can be spent on administrative costs cannot exceed 20%. Any administrative costs that over 20% need the Central Government’s consent.
- The Ministry of Home Affairs must grant prior authorization to non-governmental organizations (NGOs) seeking to accept foreign donations exceeding one crore rupees annually.
Documents Required for FCRA Registration for NGO
To register your non-profit organization under the Foreign Contribution Regulation Act (FCRA), you must have the following documents:
FCRA Registration for NGO in General
- Association Registration Certificate.
- Trust Deed/Memorandum of Association.
- Three years’ worth of audited financial statements.
- The past three years’ activity report.
- NITI Aayog Portal’s NGO Darpan ID.
- All officials’ Aadhaar cards.
Prior Permission FCRA Registration Certificate
- Registration Certificate of Association.
- Memorandum of Association/Trust Deed.
- Darpan ID from the NITI Aayog portal.
- Adhaar Card of all the office bearers.
- Commitment letter from the donor.
- Organization and agreement.
- Project report for which FC will be received.
FCRA Registration Requirements that are Mandatory
- Darpan ID: The FC-3 form’s Darpan ID field must now be filled out in order to register the FCRA for NGO. Via the NITI Aayog portal, you can obtain a Darpan ID.
- FCRA Bank Account: In order to receive donations from overseas sources, you must have an FCRA account created at the SBI New Delhi Main Branch.
- Adhaar Card: To apply for an FCRA for NGO, a key authority’s Aadhaar card must be submitted. If the member is a foreign national running an organization in India, they must have a passport or an OCI.
Procedure for FCRA Registration for NGO
Below mentioned FCRA Registration Procedure must be followed to get FCRA Registration for NGO:
- Visit FCRA Portal.
- Create Login ID.
- Fill FC-3 Form: As per requirements for registration, Different forms for FCRA;
a] FCRA Registration FC-3A
b] Prior Permission FC-3B
c] FCRA Renewal FC-3C
d] FCRA Annual Return Filing FC-4
- Upload FCRA Registration Documents Required.
- Pay the required registration fees.
FCRA Registration Fees
The ₹5,000 government fee for FCRA prior permission and the ₹10,000 government fee for a new FCRA registration for trust are required.
Benefits of FCRA
- Accept donations from Foreign: An association can accept donations from abroad without interference from the government if NGO have the FCRA and uses the funds for cultural, economic, educational, religious, or social initiatives.
- Transparency: It also aims to encourage more openness in the way non-governmental organizations and other trusts engaged in social activity raise and use foreign donations.
- Legal protection: Organization who has FCRA Online Registration receive substantial support from the government. For gifts, capital gains, and income taxes to be exempt.
- Helps Social workers: Social workers can more easily locate and accurately assess the source of income that their clients receive when they have FCRA registration certificate. It grants autonomy to institutions that promote societal well-being.
- Stops financial abuse: The government can stop financial abuse of foreign donations by registering FCRAs. Additionally, it aids in determining the true nature of donations received by the organization and how those funds are put to use for the intended purpose.
Validity and Renewal of FCRA
To keep accepting contributions from outside sources, All NGOs and trusts that receive donations from overseas must renew their FCRA registration for Trust every five years. The renewal of an FCRA registration for Trust guarantees that all trusts and NGOs that receive foreign funding do so in accordance with Indian law.
You won’t be eligible to receive any further overseas donations if you don’t renew your registration. In addition, your registration can be cancelled and you might be subject to penalties if the FCRA is discovered to have been broken.
Documents Required for FCRA renewal
- Association Registration Certificate.
- Trust Deed or Memorandum of Association.
- MHA-issued FCRA registration certificate.
- Each office bearer’s Adhaar card.
- Darpan ID from the NITI Aayog portal.
FCRA Registration Fees for Renewal
The non-profit organization must pay the ₹5000 government fee for FCRA renewal before the deadline to maintain its ability to use and receive donations from overseas sources.
Cancellation or Suspension of FCRA Registration Certificate
Authorities possess the authority to revoke the license of a registered entity by engaging with the relevant body if they perceive that the registered entity is not adhering to the legal requirements. Several factors may be considered when contemplating the cancellation of the license:
- Non-compliance of the NGO with the regulations of the Foreign Contribution (Regulation) Act.
- Failure of a company to submit its annual report within the stipulated deadline.
- Investigation into any allegations of operational misconduct against the organization, wherein contributions received are not utilized to fulfill the entity’s primary goal or the purpose stated during FCRA.
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