Foreign Contribution

Compiled by: Dr.Mohammed Guthigar

• An organisation having a definite cultural, economic, educational, religious or social
programme shall accept foreign contribution, only after such organisation obtains a certificate of
registration from the Central Government.

• Any person, if it is not registered with the Central Government, can accept foreign
contribution only after obtaining the prior permission of the Central Government and such prior
permission shall be valid for the specific purpose for which it is obtained and from the specific
source.

• Non-profit NGO organization should have a FCRA certificate to receive foreign currency
funds.

• Any type of NGO should apply to the Central government for prior permission to receive
foreign currency from outside India towards their foreign fundraising.

• When you deal with FCRA, you should also know about the documents during and after the
process of FCRA.

• There are several penalties and punishable offenses, if you misuse foreign contribution, or if
you import foreign funds without prior permission with Central government of India.

Submission for FC Registration

Application for Registration

An application for registration of an organisation for acceptance of foreign contribution shall be

made electronically on-line in Form FC-3, and shall be followed by forwarding the hard copy of the
on-line application duly signed by the Chief Functionary of the association together with the
required documents:

i.Form FC-3 duly filled in triplicate.

Ii.Audited statement of accounts of past three years.

Iii.Annual Report specifying activities of past three years.

Iv.If the association is a registered Trust or Society a certified copy of the registration certificate.

V.Copy of the Memorandum of Association and/or the Articles of Association as applicable.

Vi.List of Main objects and definite programmes for which the contribution is to be accepted /
utilised.

Vii.Details of names and addresses of the members of the Executive Committee/Governing Council
etc. of the Association.

Viii.Copy of any prior permission granted to the organization.

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Ix.Copy of resolution of Governing Body of the organisation, authorizing the registration under FCRA.

X.Copy of Power of Attorney or the resolution of Governing Body by which the Chief Functionary is
authorized to submit FC-3.

Xi.List of present members of the Governing Body of the organisation and the office bearers.

Xii.Copy of any Journal or other publication of the organization.

Xiii.If the association is having any parent or sister or subsidiary organisation which is registered
under the FCRA then the registration number along with Ministry of Home Affairs file number should
be mentioned.

Xiv.If the association has submitted any application earlier then its reference number should be
mentioned.

Xv.If the association has received any foreign contribution with or without the prior approval of the
Central Government, then the detail should be given.

Xvi.Details of Bank along through which the foreign contribution shall be received.

Xvii.A recommendation certificate from any competent authority.

Xviii.Copy of certificates of exemption or registration issued by the Income Tax Department u/s80G
and 12A.

• Normally FCRA is granted after 3 years of active existence, therefore, the application should be
made after three years though nothing in the Act prevents from making such application earlier.

Granting Process

Field Enquiry

• The FCRA department may ask the intelligence bureau for a report. Some authorities from the
intelligence bureau may visit the office and the project area of the organisation and inspect the
books of account and other records available. On the basis of the reports submitted by the
intelligence bureau the FCRA department decides whether to accept or reject the application.

• The FCRA department issues a registration certificate and provides a permanent registration
number. This registration number is required to be quoted in all future correspondences and
filling of returns and forms.

Time Limit For Granting Registration

• After making inquiry, the Central Government may register such organisation and grant him a
certificate, ordinarily within ninety days from the date of receipt of application.
In case the Central Government does not grant, within the said period of ninety days, a
certificate, it shall communicate the reasons there for to the applicant.

Validity Of Certificate

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

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Renewal Of Registration Certificate

• Every certificate of registration issued to a organisation shall be liable to be renewed after the
expiry of five years from the date of its issue on proper application.

Time Limit For Making Application For Renewal Of Registration

• Every organisation shall apply to the Central Government in Form FC-5, six months before the
date of expiry of the certificate of registration, for its renewal.

• An organisation implementing an ongoing multi-year project shall apply for renewal twelve
months before the date of expiry of the certificate of registration.

Opening of Bank Account

• As per Section17 (1), Every person who has been granted a certificate or given prior permission
under section 12 shall receive foreign contribution in a single account only through such one of
the branches of a bank as he may specify in his application for grant of certificate:

• Provided that such person may open one or more accounts in one or more banks for utilising the
foreign contribution received by him:

• Provided further that no funds other than foreign contribution shall be received or deposited in
such account or accounts.

Creation of fixed deposits

• As far as the creation of fixed deposits of FCRA funds is concerned, there is no bar on it. All the
funds are required to be received in the designated bank account but any temporary surplus
funds may be placed in fixed deposits with the bank, pending utilisation for the objects for which
they were received.

• Care should be taken that the investments are in compliance with the section 11(5) of the
Income-tax Act. It should further be ensured that the investments are not speculative in nature.

Method of Accounting

• According to the provision of FCRA 2010 requires filing of Income and Expenditure account,
annually, which was not necessary earlier. For the sake of clarity, the following returns are
required to be filed under the FCRA 2010;

• i. The return shall be filed in Form FC-6 and not FC-3. 

ii. For the first time, FC rules are asking for submission of income and expenditure account.
iii. A copy of bank statement certified by the bank has to be submitted. 
iv. A nil return is required to be filed if there is no activity. 
Earlier, filing of Income and Expenditure account was not necessary which implied that FCRA
reporting was strictly on cash basis. However, with the inclusion of Income and Expenditure
account it is clear that under FCRA 2010 both accounting and reporting need not necessarily be
on cash basis.
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• As per the requirement of FC-6 statement, the foreign contribution should be reported on cash
basis as far as receipts are concerned and the utilisation should be reported based on the
method of accounting followed.