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FCRA Registration- An Overview

Charitable Trusts, Societies, and Section 8 Companies under Section 6(1) of the Foreign Contribution Regulation Act of 2010, companies that receive foreign donations are required to acquire an FCRA registration by the authorities.

By ensuring compliance with laws governing foreign donations, this registration upholds accountability and openness in the use of foreign money. To legally accept and use foreign contributions and to protect the organization and its donors under Indian law, it is necessary to have an FCRA registration.

Objectives of FCRA Registration

The main objective of FCRA Registration is to regulate the acceptance and use of foreign contributions by individuals, associations, and organizations in India. It guarantees that foreign investments are put to good use and do not jeopardize national security.

By encouraging accountability and openness in the use of foreign donations, FCRA registration guards against their being abused for purposes that are counter-productive to the interests of the country. Additionally, it makes it easier to monitor and audit foreign contributions, making sure that they uphold moral and legal obligations while supporting humanitarian, educational, cultural, and charitable endeavours that benefit society.

Benefits of FCRA Registration

There are a wide range of benefits of FCRA Registration for non-profit entities registered in the country for charitable purposes. These are as follows –

  • FCRA Registration makes sure that the non-profit entity registered in the country can gain credibility globally. It allows these entities to lawfully accept donations from foreign land to continue their charitable purpose with ease.
  • FCRA Registration ensures that the entity can receive funding from the foreign land without any trouble. This makes these non-profit organizations more susceptible to funding and carrying out their desired tasks to make a change in society.
  • Obtaining an FCRA Registration certificate makes domestic and foreign investors more confident in the organization's activities and fulfilment of its objectives, as mentioned. These entities have to adhere to the strict rules and regulations of the FCRA, giving investors belief in the working methodology and objectives.
  • This registration ensures that these organizations are eligible for certain tax exemptions under the Income Tax Act. They also get benefits under sections 80G and 12A of the act, which require them to use those funds to meet the organization's goals and objectives.
  • With the increased foreign funding through FCRA Registration, the organization’s market sustainability increases since it receives comparatively more donations to work in the area of its activities and fulfil its purpose.

FCRA Registration Checklist

Certain FCRA Registration checklists must be met to get the registration certificate. These are as follows –

  • The entities opting to get the FCRA Registration must check their eligibility before filling out the application for registration.
  • To get the certificate, the applicant has to fill out Form FC- 3 without any mistakes to get the registration done.
  • The applicant has to furnish a self-certified registration copy of the organization or the trust deed.
  • The applicant should ensure submission of a self-certified copy of the Memorandum of Association and the Articles of Association, which should reflect the organization's aims and objectives.
  • The organization’s details of activities and projects are to be submitted for the last three years.
  • The organization’s audited financial reports of the last three years have to be submitted which must include its liabilities, assets, payments, expenditures, receipts, and other important documents.
  • If the applicant wants to renew the FCRA Registration upon its expiry, they need to start the process at least six months before the expiry date.
  • The applicant should monitor all the compliances necessary to obtain FCRA registration as per the act.
  • The application must be submitted to the Ministry of Home Affairs with proper documentation and a government fee.

Eligibility Criteria for FCRA Registration

FCRA Registration eligibility requires certain criteria to be met before sanctioning. The general eligibility criteria for FCRA Registration are as follows –

General Eligibility Criteria

  • A maximum of 20% of the foreign investment received could be used for administrative purposes, and if the amount exceeds such a limit, the entity must get prior approval from the Ministry of Corporate Affairs. The rest of the 80% should be used by such entities for performing their core activities.
  • The organization must have at least been in existence for a minimum of 3 years performing such activities.
  • The entity must have received the registration certificate under the applicable Indian laws like The Indian Trusts Act, of 1882, The Companies Act of 2013 (Section 8), or the Societies Registration Act of 1860.
  • The entity should not be involved in any illegal activities and should have clean financial records.
  • At least Rs 15 lakhs should be spent by the entity in the past 3 years for the society's benefit through its core activities.
  • An audited financial report must be submitted demonstrating financial spending on the related activities.

Activities Eligible for FCRA Registration

  • Educational Programs
  • Cultural Programs
  • Economic Development Programs
  • Social Welfare Activities
  • Religious Activities

Eligible Individuals

Even certain individuals can get registration under FCRA for certain activities like –

  • Academic or research work through foreign funds utilization.
  • Taking part in cultural programs
  • In cases of emergencies or natural disasters, assisting the needy.

FCRA Registration Exemption

Certain FCRA Registration exemptions are there must be looked at before considering foreign investment for the organization –

  • Wages, salaries, or other compensation payable to individuals or groups that a person employs from any foreign source are excluded from acceptance of foreign contributions.
  • Foreign donations received as a normal part of commercial operations carried out in India or during international trade or commerce, both domestically and internationally, are exempt.
  • In transactions involving the Central Government or State Government, the exemption also applies when foreign donations are received acting as an agent of a foreign source.
  • Any gifted foreign contributions received by the entities as per the central government rules are also exempted.
  • Contributions received from any relatives of a foreign country are also exempted.
  • If foreign contributions are made through remittance of business via post office, authorized personnel, or official channels in a foreign exchange, it is exempted as per the law.
  • Contributions from foreign land received through stipends, scholarships, etc. are exempted.

Documents Required for FCRA Registration

Certain necessary documents are required to complete the FCRA Registration within the specified time. These documents are mentioned below –

  • NGOs PAN card
  • MOU/ Trust Deed certified copy
  • Audited financial statements for the last 3 years along with expenditure and income account
  • Organizational activities for the last 3 years
  • Certificate under section 80G and 12A issued by the income tax authority.
  • Resolution copy of the NGO
  • Duly filled Form FC-3
  • SBI bank account
  • The applicant should ensure the submission of a self-certified copy of the MoA and AoA that reflect the organization's aims and objectives.

Application Procedure for FCRA Registration

The application procedure for FCRA Registration requires a certain linear approach through visiting their official website. The process is as follows –

Step 1: The applicant needs to visit the official website of the Ministry of Home Affairs- Here, you need to click on ‘FCRA Online Forms’ to proceed with the application.

Step 2: The next step is to choose the relevant form as per your need to proceed with the application. There are two options from which the applicant can choose for fresh registration, namely, Form FC-3A (Application for FCRA Registration) and Form FC-3B (Application for FCRA Prior Permission).

Step 3: You need to click on the option ‘Click to Apply Online’. The applicant has to sign up by creating their username and password. These details must be saved properly since they will be used for future reference.

Step 4: The applicant has to log in by using the username and password created previously to proceed with the application. The applicant has to choose FCRA Registration from the options displayed.

Step 5: You need to click on the form that you need to register for approval.

Step 6: In the next step, the applicant has to fill in all the details asked in the form to start the registration process online.

Step 7: The Executive Committee Form has to be filled out through the ‘The Executive Committee’ option shown on the menu. Necessary details have also to be filled out, edited, or even deleted from the option ‘Add details of key Functionary’.

Step 8: All the documents need to be uploaded after filling out the form in the portal for approval. Along with the form, the bank details of the organization need to be mentioned through which all the transactions take place. The documents should be uploaded in the PDF format.

Step 9: After filling out all the details and uploading the required documents, a government fee for the application approval has to be paid through any of the ways mentioned on the website.

After completing the payment, it will be in the hands of the authorities to check the details and decide on the approval of such an application. Once approved, the applicant will be notified of the same.

Post-Registration FCRA Compliance

Post-Registration FCRA Compliance requires certain mandatory things to be followed by the organizations to avoid penalties. These are as follows –

  • The annual returns of the organization have to be filled in Form FC 4 along with the balance sheet before 31st December of the previous financial year.
  • Any registered CA must certify the balance sheets of these entities before submission to the authorities.
  • Form FC 6A is used to change the name or the address within 45 days of registration.
  • Form FC 6B is used to change the aims and objectives of the organization within 45 days of registration.
  • Form FC 6E is used to change the association’s key members of the organization within 45 days of registration.
  • Form FC 7 can be utilized for the closure of the entity and for surrendering the registration certificate.

Penalties for Non-Compliance

Certain penalties are involved against the entities for any non-compliance by the entities. These penalties are awarded to these entities in the following scenario –

If the entity or the individual provides any wrong or false information u/s 18 or clause (c) of section 9, or has attempted to get the registration or the prior permission by false representation, fraudulent means, or even by concealing important facts, then –

  • The entity or the individual may face imprisonment of up to 6 months, a fine, or even both, depending on the circumstances of the case.
  • The authority may even seize foreign investments or any other contribution.
  • The authority may even impose fines up to 5 times the amount received by foreign donations.
  • The authority may confiscate the organization's accounts and papers.

FCRA Registration Fees

FCRA Registration fee depends on the type that has been selected by the applicant. To get the registration done the application fee ranges between Rs 10,000 to Rs 15,000. To be able to get the registration certificate, the entity must have spent a minimum of Rs 10 Lakhs in favor of the objectives of the entity stated in the MoA.

Timeline for FCRA Registration

The applicant can get the FCRA Registration certificate from the Ministry of Home Affairs in 7 – 10 days. It is to be noted that this is the time required for the authorities to grant approval and a few more will be needed before this for recollecting all the documents that are necessarily required to be attached to the form. Hence, the applicant should have all the documents at their disposal for quick disposal of the registration certificate.

Why Corpbiz?

FCRA Registration is a strong suit for Corpbiz which is a customer-focused company with a group of highly skilled specialists. Through FCRA certifications, we assist our clients in realizing their aspirations as entrepreneurs by offering them throughout support, direction, and answers to their queries.

  • 3 average Google rating
  • More than 200 experts
  • Over 250+ successful FCRA Certifications
  • 99% client retention rate

Every client of ours enjoys a smooth registration of the FCRA procedure because of our commitment to providing excellent customer service and professional support.

Frequently Asked Questions

The validity of the FCRA Registration certificate is 5 years. To renew the FCRA Registration upon its expiry, the applicant needs to start the process at least 6 months before the expiry date.

To utilize the foreign investment, the entities can use a max of 20% of the foreign investment received for administrative purposes and if the amount exceeds such limit, then the entity must get prior approval from the Ministry of Corporate Affairs. The rest of the 80% of the amount received should be used by such entities for performing their core activities.

The registration for FCRA is valid for 5 years from the date of its approval. However, the entities can apply for the renewal at least 6 months before the date of its expiry.

Rule 4 of the FCRA states that the entities need to get prior approval from the government and the authorities so that they can accept foreign investment to serve their purpose. It ensures that there is an additional layer of scrutiny and that foreign investments are managed properly and are not misused.

The Ministry of Home Affairs is responsible for managing the FCRA Certifications. Not only does it manage certifications but also looks into the implementation of policies, adherence to rules, and law compliance. It makes sure that appropriate penalties are levied against the organizations failing to follow compliance.

Charitable Trusts, Societies, and Section 8 Companies under Section 6(1) of the Foreign Contribution Regulation Act of 2010, companies that receive foreign donations are required to acquire an FCRA registration by the authorities.

There are two types of registrations for FCRA that can be taken by the applicants- the first one is prior permission, where certification is granted through Form FC-3B for one-time foreign investment, and a regular registration through Form FC-3A for regular funding for a definite time. It can be renewed at the time of expiry.

FCRA Registration ensures that these organizations are applicable for certain tax exemptions under the Income Tax Act. They get benefits under sections 80G and 12A of the act which makes them use those funds to meet the organization's goals and objectives.

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Abdul Aleem

From Delhi Recently Purchased @NGO CSR Consultancy