Online FCRA Registration in India
The world, in the present scenario, is more focused towards environmental and social causes. Businesses nowadays, apart from their primary objective of profit-making, are actively involved in activities that promote economic, social, cultural, and environmental prosperity and growth.
Today the world today is so well connected and linked that accessibility to any part of the world is very easy. Transactions between places, people, and countries take place on a daily basis. As a result, the flow of the foreign currency in and out of every country is now absolutely natural and an absolute commonality.
The volume at which these foreign currency transactions are carried on is at a very high level. As a result, it is impossible to keep the track of the outflow and inflow of foreign currency in a regularized manner. This brought the need for the coming up of the Foreign Contribution Regulation Act, 2010, in India.
What is the objective of the FCRA Registration in India?
In the year 2010, the Foreign Contribution Regulation Act, 2010, was enacted in India. This Act was enacted with the following objectives:
- To regulate the acceptance and utilization of the foreign hospitality or foreign contribution by certain individuals, companies, or associations.
- To prohibit the acceptance and utilization of the foreign hospitality or foreign contribution for any unfavorable activities to the national interest and for the matters related to it in addition to that of the incidental.
As per the Foreign Contribution Regulation Act, 2010, there are two ways in which any organization can obtain FCRA Registration in India.
The two ways are as follows:
- Normal FCRA Registration
- Prior Permission FCRA Registration
What are the eligibility criteria for FCRA Registration in India?
The eligibility criteria for FCRA Registration in India are as follows:
For Normal Registration
In order to be properly eligible for the normal FCRA registration, there are a few pre-requisites:
- The applicant is required to be registered under the Societies Registration Act, 1860, in India.
- The applicant is required to be registered under the Indian Trusts Act, 1882 in India;
- The applicant is required to be registered as a Section 8 Company as per the Companies Act, 2013 or any such other Act as may be required by the authorities;
- The applicant is required to have made a reasonable contribution by undertaking certain activities in the chosen field for the benefit of the society at large.
- The applicant is required to have spent a minimum of Rs. 10,00,000 in the last three years towards achieving its primary objectives, which excludes all the administrative expenditures.
- The applicant is required to submit all the copies of the financial statements of the last 3 years, that should be duly audited by qualified the CA or Chartered Accountants.
- If any newly registered entity likes to get some foreign contributions, then a prior approval for a specific purpose, specific activity, and from a particular source is required to be made to the Ministry of Home Affairs or MHA via the Prior Permission (PP) FCRA Registration method.
For Prior Permission Registration
The Prior Permission method of FCRA Registration is ideally suited for those organizations which are registered newly and would like to receive some foreign contributions. Such a Registration is granted for the receipt of a specific amount from any specific donor for carrying out the specific activities or projects.
The association is required to:
- Be registered under the Indian Trusts Act, 1882, or the Societies Registration Act, 1860, or registered as a Section 8 Company as per the Companies Act, 2013, or any such other Act as may be required by the authorities.
- Make a submission of a specific commitment letter from the donor to the Ministry of Home Affairs or MHA, which will indicate:
- The amount of contribution given;
- The Purpose for which such a contribution is proposed to be given.
- Where the Indian recipient organization and the foreign donor organization have common members, the following conditions need are to be met:
- The Chief Functionary of an Indian organization cannot be part of the donor organization.
- At least 51% of the members or office-bearers of the governing body of the Indian recipient organization should not be the employees or members of the foreign donor organization.
- The case where the foreign donor is an individual:
- He/she cannot be the Chief Functionary of an Indian organization.
- At least 51% of the office bearers or members of the governing body of the recipient organization are required not to be the family members and close relatives of the donor.
Which are the non-eligible entities for FCRA Registration in India?
The entities that are entities are not allowed to be granted FCRA Registration in India are as follows:
- The applicant is Benami or fictitious.
- An applicant against whom a prosecution is conducted for indulging in any unfair activity;
- An applicant who has been prosecuted or convicted for any communal tension made in any area of a specified district or in any other part of the country;
- The entity is engaged in some violent activities;
- The entity has utilized some foreign contribution for its personal use;
- An entity is debarred from accepting any foreign receipt or foreign grant under any provision of the law;
- Any such acceptance of the foreign grant that affects the entity prejudicially;
- The sovereignty of India;
- In the interest of the public;
- The relationship with any state in India.
What are the necessary documents required for FCRA Registration in India?
The documents required for FCRA Registration in India are as follows:
- Self-certified copy of the certificate of incorporation, trust deed, or any other relevant certificate held by such an entity;
- PAN of the NGO;
- Copy of Memorandum of Association and Articles of Association and institutions;
- Signature of the chief judiciary in the JPG format;
- A complete detailed report on the activities of the preceding 3 years;
- Audited copy of the financial statement, Income-Expenditure details, P&L Account, and cash flow statement of the preceding 3 years;
- Certified True Copy or CTC of the resolution passed by the governing body authorized by the NGO;
- Certificate obtained under the Sections 80G and 12A of Income Tax Act. Sections 80G and 12A provide certain tax exemption to the NGOs under the Income tax Act of India.
What is the process of FCRA Registration in India?
The step by step process of FCRA Registration in India is as follows:
- The initial step is the one where the applicant is required to access the online portal of FCRA.
- The applicant is required to click on Form FC – 3A i.e., application for FCRA Registration or Form FC – 3B i.e., application for FCRA Prior Permission, as the case may be.
- The webpage of the FCRA Registration online portal will next present the applicant with an option to file an application online.
- Once the “Apply Online” option is selected by the applicant, the next step is to create a username and password by clicking on the “Sign Up” option.
- Once a username and a password have been created by the applicant, and the message regarding the same will be displayed on the screen, the applicant can now easily log in to the account.
- Once logged in by the applicant, the “I am applying for” will have a dropdown list from which the FCRA Registration in India has to be chosen. The option of “Apply Online” is to be selected next by the applicant, following which the option of “Proceed Registration” has to be selected.
- In the next step, in the title bar, the FC-3 menu is to be clicked on by the applicant to start the new FCRA Registration procedure in India.
- This gives way to the form for the association where the applicant is required to fill out the relevant details along with the necessary attachments containing the documents which are as follows:
- Darpan Identity Proof (not mandatory);
- Association Address;
- The number of Registration;
- The date of Registration;
- Nature of the Association formed;
- Main Object of the Association formed;
- Once the details, as mentioned earlier, are filled in along with the necessary attachments, the submit button is to be selected by the applicant.
- The Executive Committee option has to be selected by the applicant next from the menu bar. The necessary details will be filled in the form for Executive Committee.
- The option “Add details of the Key Functionary” enables the applicant to add, delete, or edit the necessary details entered in the form for Executive Committee.
- Once all the Executive Committee necessary details are entered in by the applicant, the “Save” button should be clicked on next.
- Further, the details of the bank are required to be provided, including the name of the bank, account number, IFSC code, and bank’s address.
- Once the bank details are entered in by the applicant, all the required documents should be uploaded in the PDF format.
- The date and place are needed to be entered next, after which the final submission button of the application can be selected.
- The last step in the procedure is to make the online payment by clicking on that particular payment button. Once the required payment is made, and the form is submitted by the applicant, no further changes can be made to the application form.
What are the main reasons for the Cancellation of FCRA Registration in India?
In case the authorities are of the view that the entity registered is not operating as per the prescribed provisions of the law and the FCRA Registration of the entity needs to be cancelled. Such cancellation can be made by the authority by giving the notice to the concerned entity.
The reasons that can be considered while cancelling the FCRA Registration of an entity in India are as follows:
- The NGO fails to comply with the prescribed provisions of the Foreign Contribution Regulation Act, 2010;
- The entity failed to submit the annual return within the prescribed due date;
- In the case where an inquiry is made for an allegation imposed against such an organization for certain misconduct or wrong doing in the operations, and such an allegation is proved to be true;
- The foreign contribution received by the entity is not utilized for the attainment of the primary object of the entity and neither for achieving the main purpose stated during the FCRA Registration application made in India.
What are the timelines issued for Renewal of FCRA Registration in India?
Once the FCRA Registration in India is granted, the validity is for a five-year time period. Nevertheless, it is to be noted that a renewal application of the FCRA Registration in India is required to be made 6 months prior to the date of the expiry of the Registration.
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FAQs of FCRA Registration
The 2 types of FCRA Registration are Proper FCRA and Proper permission for FCRA Registration.
The points of difference are Eligibility Criteria and Period of Existence.
FCRA Registration in India, once granted, is valid for a time period of 5 years.
Yes, you can get your FCRA Registration renewed by applying for the same within 6 months before the date of expiry.
After the receipt of FCRA Registration, the entity is required to file an annual return in the prescribed form FC-4 online through the official website of https://fcraonline.nic.in.
The documents required for Form FC-4 are the scanned copy of the Income Statement, Balance Sheet, Foreign Receipt, and the expenses incurred by the entity.
Yes, it is mandatory to get all the documents certified by the Practising Chartered Accountant.
The term “FCRA” stands for Foreign Contribution Regulation Act.
An entity must file Form FC-4 within the end of 9 months from the end of the financial year, i.e., on or before the 31st day of December each year.
Yes, such a donation will be treated as a foreign contribution to India.
No, the Non-resident Indians, who still have Indian citizenship, will not be counted in this category.
As per Section 12 (4) (g) of the Regulation Act, no registered person under the FCRA can accept any amount of foreign contribution which Can lead to the incitement of an offence; endangers the life of a person; or causes any physical harm to a person.
An applicant who is registered either under Societies Registration Act 1860, Indian Trusts Act 1882, or Section 8 of the Companies Act 2013 is eligible to apply for FCRA Registration.
There are chances that the regulatory authorities might cancel or suspend your registration.
If you choose to use the contribution received for any purpose other than the objectives prescribed, there are chances that the regulatory authorities might cancel or suspend your registration.
Foreign Contribution Regulation Act 2010 acts as the governing law for FCRA Registration in India.