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2.
Introduction
• FCRA – To curb the use of foreign funds for anti-
national purposes.
• FCRA – An internal security legislation.
• FCRA – Not Regulated by RBI.
• FCRA – Regulated by Ministry of Home Affairs,
Government of India.
3.
Registration
• Any Organization having a definite -
Cultural
Social
Educational
Religious
Economic object
4.
shall accept Foreign Contribution
ONLY after satisfying two conditions :
1. It must registers itself with the Central
Government.
2. It must agrees to receive foreign contribution
only through one specific bank account.
5.
Foreign Contribution
Foreign Contribution means the donation, delivery or transfer
made by any Foreign Source;
(i) of any article,
not being on 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, exceed one thousand rupees,
ii) of any currency, whether Indian or foreign,
iii) of any foreign security as defined in clause (i) of section 2 of
the Foreign Exchange Regulation Act, 1973 (46 of 1973)
6.
Explanation:
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, shall also be deemed
to be foreign contribution within the meaning of this clause.
7.
Foreign Source
“ Foreign Source” includes-
i) the Government of
any foreign country or
territory and
any agency of such Government,
ii) any International Agency,
not being
the United Nations or any of its specialised agencies,
the World Bank,
International Monetary Fund or
such other agency as the Central Government may, by notification in the
Official Gazette, specify in this behalf,
8.
Foreign Source
iii) a foreign company
within the meaning of Section 591 of the Companies Act, 1956
(1 of 1956), and also includes-
(a) a company which is a subsidiary of a foreign company, and
(b) a multi-national corporation within the meaning of this Act,
iv) a corporation,
not being a foreign company,
incorporated in a foreign country or territory,
v) a multi-national corporation within the meaning of this Act,
9.
Foreign Source
vi) a company within the meaning of the Companies Act, 1956 (1 of
1956),
if more than one-half of the nominal value of its share capital is
held,
either singly or
in the aggregate,
by one or more of the following, namely,-
(a) government of a foreign country or territory,
(b) citizens of a foreign country or territory,
(c) corporations incorporated in a foreign country or territory,
(d) trusts, societies or other associations of individuals
(whether incorporated or not),
formed or registered in a foreign country or territory,
10.
Foreign Source
vii) a trade union in
any foreign country or
territory,
whether or not registered in such foreign country or territory,
viii) a foreign trust by whatever name called, or
a foreign foundation which is either in the nature of trust or
is mainly financed by a foreign country or territory,
ix) a society,
club or
other association of individuals
formed or registered outside India,
11.
Foreign Source
x) a citizen of a foreign country,
but does not include
any foreign institution
which has been permitted by the Central Government, by
notification in the Official Gazette, to carry on its activities
in India ;
12.
Eligible Organization
• Society under Society Registration Act, 1860
• Company under section 25 of companies Act,
1956
• Trust registered under the Bombay Public Trust
Act, 1950
• A Public Trust under general law.
13.
Every association so registered shall give
An Intimation to the Central Government within
prescribed time
As to the Amount of each foreign contribution
received
Source and the Manner from which such foreign
contribution was received
Purposes and Manner for which such foreign
contribution was utilised
14.
Specification of bank branch
• Open a Bank Account for FC Only.
• Account opened with Indian Bank before Applying
for Registration.
• Mention this Bank Account in Registration
Application
• Only this account used for receiving FC
15.
• Account used exclusively for crediting foreign
contribution only.
• Under no circumstance domestic contribution
should be mixed in this account.
• This foreign contribution does not mean in foreign
currency or exchange, and therefore an organisation
may receive foreign contribution in Indian currency.
16.
• Bank account can be changed if reasons are
relevant and justifiable, but with prior permission
from Central Government.
• Interest earned from foreign funds and investments
should also be considered as foreign contribution.
• Sale proceed from FC asset should be deposited in
the designated bank account.
17.
Check List of the
Documents to be Filled
for Registration
18.
1. Form FC-8 duly filled up in triplicate.
(Online Now)
2. Audited statement of accounts of past
three years.
3. Annual Report specifying activities of
past 5 years.
4. Detail of the beneficiaries and detail of
the socio-economic factors of the region
in which the NGO is working.
19.
5. List and geographical detail of the state, and districts
proposed for work.
6. Certified copy of the Registration Certificate.
7. Certified copy of the Bye-laws and Memorandum
and Article of Association whichever is applicable.
8. Copy of certificates of exemption or registration
issued by the Income Tax Department u/s. 80G and
12A.
9. Copy of any prior permission granted to the
organization.
20.
10. Copy of resolution of Governing Body of
the organisation, authorising the registration
under FCRA.
11. Copy of Power of Attorney or the resolution
of Governing Body by which the Chief
Functionary is authorized to submit FC-8.
12. List of present members organization.
13. Copy of any Journal or other publication of
the organisation.
21.
14.If the association is having any parent or sister
or subsidiary organisation, which is registered
under the FCRA then the registration number
along with Ministry of Home Affairs file
number should be mentioned.
15.If the association has submitted any application
earlier then its reference number should be
mentioned.
23.
Time limit for
making application
for Registration
24.
• No specific time limit has been provided under
FCRA for making an application,
– unlike Income Tax Act an organisation to apply within one
year from its creation or registration under section 12A.
• Normally FCRA is granted after 3 years of
active existence, therefore, the application
should be made after three years. *
26.
• Report/Certificate from Local DM (District
Magistrate) is sought by MoH, certifying:
The address and the field of activities in which
the organisation is working.
No adverse antecedents of the organisation,
The proposed activities will be beneficial to the
people living in that area
The detail of prior permission if taken earlier.
• Intelligence Bureau may be asked for report.
• May visit Project Area, Office
• Inspect the records and books of accounts
28.
• There is no time limit mentioned under the
FCRA either for granting or rejecting the
application. *
• Normally, the application is expected to be
processed within a period of six months.
• But it is found that applications for registration
are delayed for even two to three years.
29.
Whether registration under
Income Tax Act necessary
The FCRA does not specify registration
under Income Tax Act as a pre-condition for
getting registration under the FCRA
31.
Amended FC-8 requires:
Chief Functionary to give undertaking to:
Inform within 30days regarding change of name,
address, objects, etc. with evidence.
Not to accept any foreign contribution without prior
permission, if more that 50% of the office bearers as were
mentioned in the application for registration are changed
or replaced.*
Not to change the bank account or branch of the bank
without prior permission.
Not to accept foreign contribution before the
registration is granted or with prior permission only.
33.
If an application is rejected and
the applicant believes that an unjust order was
passed against him, then
he can appeal to High Court
within a period of sixty days
from the date of the order of
rejection.
* The period of sixty days should be counted from the date
of the order and not the date of receipt of the order.
35.
Prior permission is given on
•case-to-case basis and
•separate permission would be necessary for
any subsequent receipt and separate transactions.
Procedure for Prior Permission:
- Apply in Form FC-1A for prior approval
to the FCRA department along with the
required documents.
36.
Time limit for granting prior permission:
• Time limit of 90 days for disposal of
application
• Department may avail a further period
of 30 days to dispose
Deemed Permission:
•If permission not granted/rejected within time
limit
•Prior permission is deemed to be granted.
38.
Maintenance of Accounts:
For FC in kind – In Form FC-6
For FC in currency – In Cash Book and Ledger on
double entry basis.
For FC in Foreign Securities – In Form FC-7
Accounts maintained on yearly basis
Year starting on 1st April
Balance Sheet and Statement of receipt and payments
In Form FC-3
Duly certified by Chartered Accountant
To be furnished in duplicate
Within four months of closure of the year
40.
-Indian Company with more than 50% equity held by
foreigners, excluded from Foreign Source.
-Any Fee or cost against business, trade or commerce shall
not be considered as foreign contribution.
-Transfer to non FC organization can be made with prior
approval.
-FCRA registration shall be renewed every 5 years.
- Time limit of 90 days for disposal of Application for
registration and prior approval.
41.
-Central Government may specify donors or countries
from which FC could not be received or shall be received
with prior permission only.
-Power to cancel registration for ‘No Reasonable Activity
for 2 years’.
-After Cancellation of registration certificate all the
foreign contribution and assets shall vest with such
authority as may be prescribed.
-Multiple bank accounts can be opened for the purposes
of utilisation provided only one bank is maintained