FCRA Compliance Checklist for NGOs
To ensure that your NGO or organization complies with the Foreign Contribution (Regulation) Act, 2010 (FCRA), here is a comprehensive checklist of compliance requirements under FCRA:
1. FCRA Registration
- Ensure your organization has valid FCRA registration. Registration is required if your NGO plans to accept foreign contributions.
- If not registered, apply for prior permission (if only receiving foreign funds for a specific purpose).
- Ensure renewal of registration every 5 years, as FCRA registration is valid for a 5-year term.
2. Designated FCRA Bank Account
- Open a designated FCRA bank account in the State Bank of India (SBI) New Delhi branch (if not already done).
- Ensure that all foreign contributions are deposited only into this account.
3. Maintain Proper Documentation
- Maintain records of foreign contributions received.
- Record and track the purpose of each donation to ensure funds are used only for the approved purposes.
- Keep all invoices, bills, and supporting documents related to the use of foreign contributions.
- Keep updated audit reports.
4. Submission of Annual Returns
- File FC-4 (Annual Return) electronically every year before 31st December for the preceding financial year (April 1 – March 31).
- Provide accurate details of foreign contributions received during the year, including:
- The name of the donor
- The amount received
- Purpose of the contribution
- Details of how the funds were utilized.
5. Compliance with Utilization Norms
- Ensure that foreign funds are used only for the purpose mentioned in the application for registration.
- The organization should not divert funds for activities other than the approved ones.
- The use of foreign funds must align with the goals and objectives stated at the time of registration.
6. Maintain Records of Key Functionaries
- Verify and update details of key functionaries, such as board members and senior staff, and ensure Aadhaar verification for all key functionaries as per the amendments in 2020.
- Ensure that none of the functionaries are disqualified under the FCRA (e.g., government employees, legislators, media houses).
7. Restriction on Sub-Grants
- Do not sub-grant foreign funds to other organizations, unless specifically allowed under the FCRA.
8. Regular Monitoring
- Ensure regular internal audits to ensure that foreign funds are used appropriately.
- Monitor and update the FCRA records on an ongoing basis, especially when there are changes in leadership, key functionaries, or other significant structural changes.
9. Compliance with the 20% Cap on Administrative Costs
- Ensure that administrative expenses (like salaries, overheads, etc.) do not exceed 20% of the foreign contributions received, as per recent amendments.
- Report these expenses accurately in the FC-4 return.
10. Display Foreign Contribution Details on Website
- Ensure that the organization’s website displays details about foreign contributions received, as per the FCRA requirements.
How to File the FC-4 return (Annual Return)
The FC-4 return is an annual requirement for organizations registered under FCRA. Here’s a step-by-step guide to help you file the FC-4 return:
Step 1: Prepare the Necessary Documents
- FCRA Registration number (and renewal details if applicable).
- Foreign contribution details for the financial year (April 1 – March 31).
- List of foreign donors with their respective amounts and purposes.
- Audited financial statements of the NGO for the relevant period.
- Aadhaar details of key functionaries.
Step 2: Log into the FCRA Portal
- Visit the official FCRA website of the Ministry of Home Affairs (MHA): https://fcraonline.nic.in.
- Log in using your FCRA ID and password.
Step 3: Go to the "FC-4" Return Section
- Once logged in, navigate to the “FC-4” Annual Return section.
- Select the financial year for which you are filing the return.
Step 4: Fill in the Required Details
- Enter the foreign contribution details in the provided sections. This will include:
- Total amount of foreign contribution received.
- Detailed information on individual donations.
- Purpose and usage of foreign funds.
- Details of administrative expenses.
- Attach the audited financial statements and Aadhaar details of key functionaries.
Step 5: Review the Information
- Double-check the accuracy of the data before submitting it.
- Ensure that all required sections are completed.
Step 6: Submit the Return
- Once reviewed, click on submit to send the FC-4 return.
- After submission, a confirmation receipt will be generated.
- Download and keep a copy of the confirmation for your records.
Step 7: Submit Hard Copies (If Required)
- In some cases, you might be required to send a physical copy of the FC-4 return or supporting documents to the Ministry of Home Affairs. However, this is generally not required anymore, as the return is filed electronically.
Step 8: Confirmation of Filing
- After successful submission, ensure that you receive a receipt number for your filing.
- This will be your proof of compliance for the financial year.
Important Deadlines:
- Filing of FC-4: Must be submitted within 9 months after the close of the financial year, i.e., by 31st December each year.
- Late Filing Penalty: If you miss the deadline, your FCRA registration may be suspended until the return is filed.
Consequences of Non-Compliance:
- Suspension or cancellation of FCRA registration.
- Penalties or legal action for not filing or misreporting contributions.
By following this checklist and filing the FC-4 return properly, your NGO can ensure compliance with the FCRA regulations and maintain its eligibility to receive foreign contributions.
9911796707
