There are many good reasons for the present global platform to focus on social, environmental, and cultural issues. Not just specific companies and organizations, apart from having profit as their primary aim, are also involved in initiatives that encourage economic, social, and environmental development and growth. The world is collaborating to promote these initiatives, and it’s becoming easy and readily accessible in the present scenario. Transactions between individuals, places, and countries occur regularly. The flow of currency exchange between and out of all nations is now a natural thing and is a fact of life. In India, where NGOs receive donations or foreign contributions, they must register themselves as a part of the Foreign Contribution Regulation Act, 2010. In this article, we will discuss FCRA and its Benefits of FCRA Registration
What is FCRA?
FCRA stands for Foreign Contribution Regulation Act. When any charitable institution such as Trust, Society, and Section 8 Company registered under Companies Act,2013, wants to receive funds or donations from foreign entity/resources, they shall register themselves under the FCRA, 2010.
As per Section 6 of FCRA, 2010, it is stipulated that any organization having-
- A definite cultural
- Economic motives shall accept foreign donations only after obtaining FCRA Registration.
Foreign Contribution under FCRA
Foreign contribution under FCRA covers any-
- Delivery or
- Transfer made by any foreign source… of anything” considering that it is not transferred as a gift, or if its market value in India during the period it was made is “to some extent such sum as may be prescribed ever so often by the Central government.”
Any form of currency or security can fall within the provisions of the Act; however, it does not cover cash that is received “by way of fee… or towards cost in place of goods or services provided by the respective organization in the normal course of his business, trade, or commerce whether within India or outside India”.
Pre-requisites for Online FCRA Registration
The Organization must be registered to use its funds for charitable purposes.
- NPO should be in existence for the last three years.
- The Organization must be registered under Non-Profit Organization Darpan Registration.
- The Organization must agree to receive foreign contributions through a single bank account.
Purpose of Foreign Contribution Regulation Act, 2010
The purpose of Foreign Contribution Regulation Act, 2010 was-
1. Control the use and acceptance of foreign contributions or hospitality by specific organizations or corporations.
2. The prohibition of the use and acceptance of foreign hospitality or contribution to activities that are not favorable to national security and any matters connected to them or in connection with.
Who is eligible for FCRA Registration?
Below mentioned are the conditions that make you eligible to apply for FCRA Registration:
1. The actual existence of NGOs.
2. No prosecution against the NGO for the following reasons-
- Forced ConversionCreating Discord
- Creating Communal Tensions.
3. There is no evidence against the NGO that points toward using violence to achieve its objective.
4. No diversion of foreign investment towards personal gains.
5. The NGO shouldn’t be accused of using the donated funds to do anything other than charity.6. The NGO should not be barred from accepting foreign charity donations.
6. Non-governmental organizations should not be able to divert foreign investment for personal gain.
7. There shouldn’t be any personnel, or a group of people within an NGO found guilty under any law or has a pending case.
Non-Eligibility for FCRA Registration
A wide range of entities are prohibited from receiving foreign money, such as election candidates or those associated with-
- Registered newspaper,
- Judges and government authorities, and
- Employees of any company-owned or controlled by the government or lawmakers.
- Political party members and office bearers are also barred from receiving foreign-funded funds.
Benefits of FCRA Registration in India
Below mentioned are the Benefits of FCRA Registration-
1. An organization registered under FCRA will have an excellent standing in society.
2. The organizations benefit from FCRA registration of those who work for the benefit and welfare of the people and are engaged in social activities.
3. FCRA Registration helps the Organization legally receive foreign contributions and government aid.
4. FCRA Registration is an official Government Registration approved by the regulator that helps the applicant avail the benefit from the government.
5. An organization registered under FCRA may receive contributions from foreign organizations and ongoing assistance and investment from other entities.
Also, the main benefit of FCRA registration is that an organization registered under FCRA can reach out to international bodies for donations. These International Bodies are-
- British High Commission
- Infinity Foundation
- Ford Foundation
- Canadian High Commission
- New Zealand High Commission
- Japanese Embassy
- European Commission
NGO that wishes to get donations from foreign sources needs to have FCRA registration from the Ministry of Home Affairs under FCRA. For acquiring contribution, the FCRA Registration is inevitably essential. The benefits of FCRA Registration are availed by the organization who works for Public Betterment and are involved in social work.
Read our Article:FCRA Registration for Trust and other Charitable Societies: Explained