What is the Foreign Contribution - FCRA - Ready Reckoner - FEMA

What is foreign contribution? As defined in Section 2(1)(h) of FCRA Act, 2010, Foreign Contribution means the donation, delivery or transfer made by any foreign source (i) Any article, Exception:- not being an 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 is not more than 100,000/- such sum as may be specified from time to time by the Central Government by the rules made by it in this behalf. [ Rule 6A of FC(R) Rules 2011 ] (ii) Any currency , whether Indian or foreign (iii) Any security as defined in section 2(h) of the Securities Contracts (Regulation) Act, 1956 and (iv) Any foreign security as defined in Section 2(o) of the FEMA Act, 1999 Explanation 1 Nature of Contribution 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, Whether Foreign Contribution or not shall also be deemed to be foreign contribution within the meaning of this clause. Explanation 2 Nature of Contribution (i) The interest accrued on the foreign contribution deposited in any bank referred to in section 17(1) of FCRA, 2010 or (ii) any other income derived from the foreign contribution or interest thereon Whether Foreign Contribution or not shall also be deemed to be foreign contribution within the meaning of this clause. Explanation 3 Nature of Contribution:- (i) Any amount received, by any person from any foreign source in India, by way of fee (including fees charged by an educational institution in India from foreign student) or (ii) towards cost in lieu of goods or services rendered by such person in the ordinary course of his business, trade or commerce whether within India or outside India or (iii) any contribution received from an agent or a foreign source towards such fee or cost Whether Foreign Contribution or not shall be excluded from the definition of foreign contribution within the meaning of this clause. Person Define under section 2(1)(m) of FCRA Act, 2010 , Includes (i) an individual; (ii) a Hindu undivided family; (iii) an association; (iv) a company registered under section 8 of the Companies Act, 2013. Foreign Source under section 2(1)(j) of FCRA Act, 2010 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, specify in this behalf; (iii) a foreign company; (iv) a corporation, not being a foreign company, incorporated in a foreign country or territory; (v) a multi-national corporation referred to in sub-clause (iv) of clause (g); (vi) a company within the meaning of the Companies Act, 1956, and 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) the Government of a foreign country or territory; (B) the 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; (E) foreign company; Provided that where the nominal value of share capital is within the limits specified for foreign investment under the Foreign Exchange Management Act, 1999, or the rules or regulations made thereunder, then, notwithstanding the nominal value of share capital of a company being more than one-half of such value at the time of making the contribution, such company shall not be a 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 or a foreign foundation, by whatever name called, or such trust or foundation mainly financed by a foreign country or territory; (ix) a society, club or other association of individuals formed or registered outside India; (x) a citizen of a foreign country;