The Foreign Contribution (Regulation) Act, 2010 (FCRA) and its accompanying Foreign Contribution (Regulation) Rules, 2011 are legislative frameworks enacted by the Government of India to regulate the acceptance and utilization of foreign contributions or foreign hospitality by individuals, associations, and companies.
🏛️ Objective of the FCRA Act & Rules
- To ensure that foreign contributions do not affect:
- Sovereignty and integrity of India
- Public interest
- National security
- Electoral and democratic processes
- To increase transparency and accountability in the use of foreign funds by NGOs and other entities.
📘 Key Provisions of the FCRA Act, 2010
1. Registration & Prior Permission
- Any NGO, trust, or other eligible entity must register under FCRA or obtain prior permission before accepting foreign funds.
2. Designated FCRA Bank Account
- Foreign contributions must be received only in a designated bank account, currently mandated to be with SBI’s New Delhi branch.
3. Eligible Recipients
- Includes NGOs, charitable organizations, educational and cultural bodies.
- Prohibits certain individuals and entities from receiving foreign contributions (e.g., election candidates, judges, government servants, media houses).
4. Utilization & Reporting
- Foreign funds must be used only for the stated purpose and not for speculative activities.
- Annual returns (Form FC-4) must be filed electronically within 9 months of the end of the financial year.
📘 Key FCRA Rules, 2011 (with Amendments)
✅ Highlights:
- Form FC-3A/FC-3B: Application for registration or prior permission
- Form FC-4: Annual return filing format
- Declaration of foreign contributions received must be made public on the entity’s website.
- Requirement to renew FCRA registration every 5 years.
🔁 Important Amendments (esp. 2020 onwards):
- Restriction on sub-granting foreign funds to other NGOs.
- Mandatory Aadhaar for key functionaries.
- Reduced administrative expense cap to 20% of foreign funds received (earlier 50%).
- Suspension of FCRA license if the entity fails to comply.
❌ Prohibited Recipients under FCRA
- Political parties
- Government servants
- Members of legislature
- Judges
- Journalists of registered newspapers/media (in certain cases)
🛑 Penalties for Violation
- Suspension or cancellation of registration
- Seizure of foreign contributions
- Fines or imprisonment for severe violations
📑 Conclusion
The FCRA Act and Rules are designed to regulate foreign donations to ensure they are used for legitimate and transparent purposes that align with India's national interest. All entities receiving such funds must comply strictly with the registration, reporting, and utilization norms outlined in the law.
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