FCRA Registration: Understanding the Eligibility, Registration Process, & More
- Bhavika Rajput
- Jul 30
- 8 min read
Social and environmental issues are receiving increased attention worldwide these days. As a part of this conscious approach, businesses actively participate in initiatives that foster social, economic, cultural, and environmental growth and prosperity in addition to their primary goal of producing a profit. As they take up such initiatives, they often get support and contributions from other parts of the world. Before receiving any foreign contributions or donations from foreign sources, any Indian individual, association, or business must register with the Central Government in accordance with section 11 of the Foreign Contribution (Regulation) Act, 2010 (FCRA). A person may only accept foreign contributions with prior authorisation from the Central Government if they do not register as mentioned above. The Ministry of Home Affairs, Government of India, oversees registration under the FCRA.
Table of Contents
What is FCRA Registration?
Organisations in India must be registered under the Foreign Contribution Regulation Act (FCRA) in order to lawfully accept contributions from overseas. It permits NGOs, trusts, societies, and Section 8 companies to receive funds for social, religious, educational, and cultural activities. It was issued by the Ministry of Home Affairs in accordance with the FCRA Act of 2010. The five-year validity of an FCRA registration necessitates prompt renewal and rigorous adherence to rules, including filing yearly returns, in order to avoid fines. The FCRA portal is used to complete the application process online.
Objectives of FCRA
The 2010 Foreign Contribution Regulation Act was passed with the following goals in mind:
Control the use and acceptance of foreign hospitality or contributions by specific organisations or businesses.
Prohibit accepting and using foreign hospitality or contributions for any acts that are detrimental to the national interest, as well as for matters associated with or incidental to such activities.
Benefits of FCRA Registration
Organisations that are registered with the FCRA are free to accept donations from overseas for certain social, cultural, educational, religious, or economic initiatives.
By guaranteeing that NGOs and other trusts engaged in social causes appropriately disclose how foreign money is obtained and spent, the FCRA Act registration and getting an FCRA licence encourage more transparency. Getting an FCRA registration is essential since it is simpler to search for an FCRA registration number in the public records.
Government assistance, including exemptions from income, capital gains, and contribution taxes, is granted to organisations established under the FCRA, offering substantial financial and legal protection.
The FCRA status of registration gives organisations that seek to promote societal welfare more freedom and helps social workers by enabling them to identify and assess the sources of foreign funding received by their clients.
By verifying that funds are used for their intended objectives and in accordance with regulations, the FCRA registration system assists the government in preventing the misuse of foreign donations.
FCRA Amendment Bill, 2020
The amount of foreign input has almost doubled in the last 10 years, but the government says the funds aren't being used for their intended purposes. Under FCRA 2020, only 20% of foreign funds are permitted to be used for administrative purposes, unlike 50% under FCRA 2010. This could hinder the operations of a number of small NGOs that depend on these types of contributions. The goal of the new rules is to increase transparency and accountability in relation to the receipt and utilisation of foreign currency. The bill also mandates that beneficiaries have an Aadhaar number (for foreigners, a passport or OCI card will be needed as proof of identity).
Entities Covered under FCRA
Under FCRA, the following types of organisations are covered:
Non-Governmental Organisations (NGOs): NGOs engaged in commercial, religious, educational, cultural, or social activities are required to register with the FCRA before they may receive foreign funds.
Associations: Any society, trust, or nonprofit that intends to receive donations from foreign countries is subject to the FCRA.
Individuals: People must also register with the FCRA if they want to receive gifts from abroad for social, cultural, religious, or educational purposes.
Eligibility Criteria for FCRA Registration
Normal Registration
A few requirements must be met in order to qualify for regular registration:
The application must be registered as a Section 8 Company under the Companies Act of 2013 or any other Act as necessary, or under the Societies Registration Act of 1860 or the Indian Trusts Act of 1882.
It must have undertaken activities in its chosen field for the benefit of society and made reasonable contributions.
It must have invested at least Rs. 10,00,000 in the past three years to accomplish its goals (excluding administrative costs).
Copies of the most recent three years' worth of financial statements that have been properly audited by certified chartered accountants must be submitted.
A newly registered entity may use the Prior Permission (PP) approach to request clearance from the Ministry of Home Affairs for a specific activity, purpose, and source if it would like to receive foreign donations.
Prior Permission Registration
For newly registered organisations that wish to accept contributions from overseas, the Prior Permission route is the best option. This is given in exchange for receiving a certain sum from a certain donor in order to carry out particular initiatives or activities. The organisation needs to:
Be registered as a Section 8 Company under the Companies Act of 2013 or any other Act that may be necessary, or under the Societies Registration Act of 1860 or the Indian Trusts Act of 1882.
Send the Ministry of Home Affairs the donor’s commitment letter stating the amount of money donated and the reason for the donation.
The following requirements must be fulfilled in cases when the foreign donor organisation and the Indian recipient organisation share members:
The Chief Functionary of the Indian organisation is not allowed to be affiliated with the donor organisation.
Employees or members of the foreign donor organisation should not make up at least 51% of the members or office-bearers of the Indian recipient organization's governing body.
If the foreign contributor is an individual:
He is not permitted to serve as the Indian organization's chief functional officer.
The receiving organization's governing body members and office bearers should not be at least 51% of the donor's family members.
Documents Required for Normal FCRA Registration
Registration Certificate of Association
Trust Deed/Memorandum of Association
Audited Statement of Accounts for the last three years
Activity Report for the last three years
Affidavit
A JPG file of the seal of the association the and signature of the chief functionary
Documents Required for Prior Permission FCRA Registration
Registration certificate of association
Trust Deed/Memorandum of Association
Project report for which FC is to be received
Commitment letter from the donor organisation and agreement
Affidavit
A JPG file of the seal of the association and the signature of the chief functionary
Steps for FCRA Registration
The procedures to apply for FCRA registration are as follows:
Step 1: It is necessary to access the FCRA's website as the initial step.
Step 2: You must click on either Form FC-3A (Application for FCRA Registration) or Form FC-3B (Application for FCRA Prior Permission), as appropriate.
Step 3: The user will next be given the opportunity to apply online via the webpage.
Step 4: Following the selection of the "Apply Online" option, click "Sign Up" to generate a username and password.
Step 5: The applicant can access the account by logging in after creating a username and password and seeing the corresponding message on the screen.
Step 6: FCRA Registration should be chosen from the dropdown list in the "I am applying for" section after logging in. Following the selection of "Apply Online," "Proceed Registration" must be chosen.
Step 7: Then, to begin the new registration process, click the FC-3 menu in the title bar.
Step 8: This leads to the association form, which requires the applicant to input the pertinent information, such as:
Darpan ID (not required)
Association Address
Registration Number
Registration Date
Association Type
Association's primary goal
Following this, the aforementioned documents have to be attached. The submit button is chosen after these fields have been completed and the attachments have been added.
Step 9: Next, you must choose the Executive Committee option from the menu bar. The Executive Committee form will be filled out using the information.
Step 10: The applicant can add, remove, or update the information entered in the Executive Committee by selecting the "Add details of Key Functionary" option.
Step 11: The "Save" button needs to be hit when all Executive Committee information has been submitted.
Step 12: Additionally, bank information such as the bank's name, account number, IFSC code, and address must be supplied.
Step 13: All necessary documents must be supplied in PDF format after the bank details have been provided.
Step 14: After entering the date and location, you can click the "Final Submission" button.
Step 15: Clicking on that specific button to complete the online payment is the last step. No modifications can be made to the aforementioned form once money has been received and it has been submitted.
The FCRA registration is valid for five years after it is approved. However, it should be mentioned that a renewal application for FCRA registration must be submitted six months before the expiration date.
Conclusion
Prior to receiving foreign donations for a variety of socioeconomic projects, organisations must register with the FCRA. Many claim that the FCRA's regulations are overly onerous and that they make it difficult for approved organisations to conduct legitimate social work. Also, it has been alleged that the FCRA has been applied selectively, excluding certain groups based on their ideological or political affiliations. The FCRA registration process is perceived as being challenging and time-consuming, especially for smaller businesses with limited resources and capacity. Companies must understand the eligibility requirements, procedure, compliance requirements, and consequences of FCRA registration in order to successfully navigate this regulatory environment and positively influence society.
Frequently Asked Questions
What are the requirements for an FCRA account?
By obtaining an FCRA registration certificate from the Central Government, an organisation or individual that focuses on social, cultural, educational, religious, or economic issues may receive contributions from outside.
How do I get FCRA for my NGO?
Create a Login ID.
Complete the FCRA Registration Form (FC-3A)
Upload the documents for the registration process.
Print the application and pay the fees.
What is FCRA registration?
Charitable trusts, societies, and Section 8 companies that accept donations or contributions from foreign sources are required to register under Section 6(1) of the Foreign Contribution Regulation Act, 2010. An FCRA registration is a registration under the Foreign Contribution Regulation Act of 2010.
Who cannot accept FCRA?
No political organisation that is not a political party is permitted to accept any foreign contributions, as stated in section 3(1)(f) of the FCRA, 2010. On behalf of such an organisation, no individual may collect donations from outside sources.
To which organization is the FCRA applicable?
The FCRA must be followed by all associations, NGOs, and organisations that want to take donations from abroad. The FCRA requires all of these non-governmental organisations to register. As long as all requirements are fulfilled, the initial registration period of five years may be extended.
Which bank can open an FCRA account?
You can open a designated FCRA account at NDMB by visiting the nearest SBI branch or any other SBI branch of your choice if you currently have an FCRA account with another bank. The Account Opening Form (AOF) and all required documentation, including your KYC documents, must be submitted.
What is the limit for FCRA?
A few changes have been made in accordance with the FCRA 2022 Rules. Among these modifications was an increase from seven to twelve compoundable offences. Additionally, the regulations extended the period for notifying the government about the opening of bank accounts and increased the maximum for contributions from relatives overseas that do not need government notification from Rs 1 lakh to Rs 10 lakh.
Is there a need to renew the FCRA registration certificate?
Yes. Every individual who has been given a certificate of registration under Section 12 of the FCRA, 2010 is required under Section 16 to have that certificate renewed within six months of the certificate's expiration date.
What is the FCRA registration fee?
The FCRA registration fee is Rs. 10,000.
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