Foreign Contribution (Regulation) Act or FCRA regulates the acceptance and utilisation of the inflow of foreign contributions or aid to India. This law is enforced by the Ministry of Home Affairs.

The intention behind this act is to prevent foreign organisations from dominating—or even influencing—social, political, economic, and religious discussions in India. FCRA prohibits certain individuals and organisations from accepting any foreign contribution. These include political parties, government employees, print or visual media outlets, and so on. Companies that are allowed to receive foreign funds can only do so after obtaining a registration. However, the Act now (especially after the 1984 amendment) focuses on Non Profit organizations.

The eligibility criteria to be registered under the FCRA for a nonprofit are:

1. The organisation must be registered under an existing legislative Act, such as the Societies Registration Act, Companies Act, or as a public charitable trust, etc;
2. It must be in existence for at least 3 years;
3. In those three years, it must have undertaken activities in its chosen field for the benefit of society, for which it seeks foreign contribution; and
4. The organisation must have spent at least INR 10 lakhs towards its aim. This is excluding administrative expenses.

Each nonprofit is also assigned an FCRA registration number. In 2015-16, there were 23,802 FCRA-registered nonprofits in India. Further, FCRA affects nonprofits by requiring them to file annual returns. An organisation that has been permitted to accept foreign donations needs to maintain separate accounts for foreign contributions. They have to submit an annual return, certified by a chartered accountant, giving details of the receipt and purpose-wise utilisation of foreign contribution.

An organisation that does not file annual returns might face a penalty or cancellation of registration. To get the FCRA registration certificate, one has to apply online by filling form FC-3. Also, there is a list of documents that need to be attached, and a fee that needs to be paid online.

Refusal:

Section 12(4)(a) of FCRA states the grounds or the reasons on the basis of which an application can be rejected. If the Central Government after making the necessary inquiry is of the opinion that the person making an application for registration is fictitious or benami; has been prosecuted or convicted for indulging in activities aimed at conversion through inducement or force, either directly or indirectly, from one religious faith to another; has been prosecuted or convicted for creating communal tension or disharmony in any specified district or any other part of the country; has been found guilty or diversion or mis-utilisation of its funds; is engaged or likely to engage in propagation of sedition or advocate violent methods to achieve its ends; is likely to use the foreign contribution for personal gains or divert it for undesirable purposes; has contravened any of the provisions of this Act; has been prohibited from accepting foreign contribution.

Where the Central Government refuses the grant of certificate, it shall record in its order the reasons therefore and furnish a copy to the applicant. The Central Government may not communicate the reasons for refusal for grant of certificate to the applicant in cases there is no obligation to give any information or documents or records or papers under the Right to Information Act, 2005.

Validity Of Certificate

Every certificate of registration granted to an organisation under the Act shall be valid for a period of five years from the date of its issue.

Jotwani Associates Legal Services Includes the following:

• Advising NGOs of compliances and eligibility criteria for obtaining FCRA
• Filing, documentation and seeking approval of FCRA Application with the Ministry of Home Affairs
• Follow-ups with the FCRA Department and answer any queries or clarifications that the Ministry may have
• Appealing any decision of rejection, if any
  

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