FAQs - NGO sector/Charitable Trusts/Charitable Societies
FOREIGN CONTRIBUTION ACT (FCRA)
What is foreign contribution?
As defined in Section 2(1)(h) of FCRA, 2010, “foreign contribution” means the donation, delivery or transfer made by any foreign sour...Read More
Whether earnings from foreign client(s) by a person in lieu of goods sold or services rendered by it is treated as foreign contribution?
No. As clarified at Explanation 3 above, foreign contribution excludes earnings from foreign client(s) by a person in lieu of goods sold or servi...Read More
Section 2(c)(i) of repealed FCRA, 1976 inter alia defined foreign contribution as the donation, delivery or transfer made by any foreign source of any article, not given to a person as a gift for personal use, if the market value, in India, of such article exceeds one thousand rupees. What limit has been prescribed in FCRA, 2010 in respect of such articles?
The limit has been specified as Rs. 25000/- through insertion of the following Rule 6A in FCRR, 2011 vide the Foreign Contribution (Regulation)&n...Read More
Who can receive foreign contribution?
A ‘person’, as defined in Section 2(1)(m) with the exclusion of those mentioned in Section 3 of FCRA, 2010, having a definite cultura...Read More
Who cannot receive foreign contribution?
As defined in Section 3(1) of FCRA, 2010, foreign contribution cannot be accepted by any: (a) a candidate for election;(b) correspondent, column...Read More
Whether donation given by Non-Resident Indians (NRIs) is treated as ‘foreign contribution’?
Contributions made by a citizen of India living in another country (i.e., Non-Resident Indian), from his personal savings, through the normal&nbs...Read More
Whether donation given by an individual of Indian origin and having foreign nationality is treated as ‘foreign contribution’?
Yes. Donation from an Indian who has acquired foreign citizenship is treated as foreign contribution. This will also apply to PIO card holders&nb...Read More
Whether foreign remittances received from a relative are to be treated as foreign contribution as per FCRA, 2010?
The position in this regard as given in Section 4(e) of FCRA, 2010 and Rule 6 of FCRR, 2011 are as under: Subject to the provisions of section 1...Read More
Whether individuals not covered under section 3 or a HUF can accept foreign contribution freely for the purposes listed in section 4 of FCRA, 2010?
Yes. Since, subject to the provisions of section 10, even the persons specified under section 3, i.e., persons not permitted to accept foreign&nb...Read More
Can the fee paid by the foreign delegates/participants attending/participating in a conference/seminar etc. be termed as foreign contribution and thus require permission from FCRA?
“Delegate/participation Fees” paid in foreign currency by foreign delegates/participants for participation in a conference/seminar an...Read More
Can foreign contribution be received in rupees?
Yes. Any amount received from ‘foreign source’ in rupees or foreign currency is construed as ‘foreign contribution’ under...Read More
Will interest or any other income earned from foreign contribution be considered foreign contribution?
Yes....Read More
Whether interest or any other income earned out of foreign contributions be shown as fresh foreign contribution receipt during that year or not?
Yes. The interest or any other income earned out of such deposit should be shown as second /subsequent foreign contribution receipt in the a...Read More
Can NGOs use the foreign contributions for investment in Mutual Funds and other speculative investments?
No. Speculative activities have been defined in Rule 4 of FCRR–2011 as under:- (1) (a) any activity or investment that has an element of r...Read More
Can capital assets purchased with the help of foreign contributions be acquired in the name of the office bearers of the association?
No. Every asset purchased with foreign contribution should be acquired and possessed in the name of the association since an association has...Read More
Can an association invest the foreign contribution received by it in profitable ventures and proceeds can be utilized for welfare activities?
No. The association should utilize such funds for the welfare purpose or activities for which it is received. The utilization should be in line w...Read More
Can foreign contribution be received in and utilised from multiple Bank Accounts?
No fund other than foreign contribution can be deposited in the exclusive single FC account of a Bank, as mentioned in the order for registr...Read More
Whether inter-account funds transfer shall be allowed within the multiple accounts that an Association is now permitted to open for the purpose of utilizing the foreign contributions and the level of diligence required on the part of the Banks in this regard?
Transfer of funds is allowed from the designated FC account of an Association to the multiple account or accounts opened for its utilization.&nbs...Read More
Can foreign contribution be mixed with local receipts?
No. Foreign contribution cannot be deposited or utilised from the bank account being used for domestic funds....Read More
Whether expenses like ‘interest paid to bank’, ‘bank charges’, ‘hospitality’ etc. can be included in ‘administrative expenses’?
No. The definition of as ‘administrative expenses’, as given in Rule 5 of FCRR, 2011 is explicit in this regard....Read More
Is there any restriction on transfer of funds to other organisations?
Yes. Section 7 of FCRA, 2010 states:- “No person who– (a) is registered and granted a certificate or has obtained prior permission ...Read More
How would an organisation that is registered or has obtained prior permission under FCRA and intends to transfer a part of the foreign contribution received by it to another organisation would know whether the recipient organisation has been proceeded against under FCRA?
Where any organisation is proceeded against under FCRA, it is done with due intimation to the organisation concerned. Therefore, the donor o...Read More
What are the eligibility criteria for grant of registration?
For grant of registration under FCRA, 2010, the association should: (i) be registered under the Societies Registration Act, 1860 or the Indian T...Read More
What are the eligibility criteria for grant of prior permission?
An organisation in formative stage is not eligible for registration. Such organisation may apply for grant of prior permission under FCRA, 2010. ...Read More
Whether the amount of foreign contribution for which prior permission has been granted can be received by an association in installments ?
There is no bar on receiving such foreign contribution in installments. However, the aggregate amount should not exceed the specified amount ...Read More
Whether Banks should allow an association which is applying for registration or prior permission under FCRA, 2010 to open an exclusive FC A/c with INR?
Yes. However, the Banks should not allow any foreign inward remittance in that A/c till such time the association is granted registration or...Read More
Whether an association should open an exclusive FC A/c before submission of an application for registration or prior permission?
Yes. Since the FC A/c through which foreign contribution is proposed to be received and utilised is to be mentioned in the application seeking&nb...Read More