FCRA REGISTRATION

In India, any individual, association, or company wishing to receive foreign contributions must obtain registration under the Foreign Contribution (Regulation) Act, 2010 (FCRA). If registration is not acquired, prior permission from the government is necessary. The Ministry of Home Affairs oversees the FCRA registration process.

What is FCRA?

The Foreign Contribution Regulation Act (FCRA), introduced in 1976, regulates the acceptance of foreign donations by Indian organizations, ensuring that these funds are used responsibly and transparently for societal welfare.

Types of FCRA Registration

  • Normal Registration: This applies to organizations that have been operational for at least three years and have spent a minimum of Rs. 10 lakhs on societal initiatives (excluding administrative expenses). The organization must be registered under Indian laws like the Societies Registration Act, Indian Trusts Act, or Section 8 of the Companies Act.
  • Prior Permission: This is for new organizations that haven't yet met the three-year operational requirement. The organization must have a specific project planned and a donor commitment letter specifying the amount and purpose of the contribution. Prior permission is given based on the project and the donor’s commitment.

Benefits of FCRA Registration

  • Receive Foreign Donations: FCRA registration allows organizations to receive foreign contributions for designated social, educational, religious, or cultural purposes without government restrictions.
  • Transparency: Registration ensures organizations disclose how foreign funds are raised and utilized, promoting accountability.
  • Legal and Tax Protection: Registered organizations benefit from tax exemptions on income, capital gains, and donations, providing both legal and financial safeguards.
  • Support for Social Workers: FCRA registration helps social workers track and analyze foreign donations, ensuring transparency and freedom for organizations involved in societal welfare.
  • Prevention of Fund Misuse: The FCRA system ensures foreign donations are used appropriately, reducing the risk of misuse.

Eligibility Criteria for FCRA Registration

The following criteria must be met for FCRA registration:

  • Legal Registration: The organization must be registered under one of the following statutes:
    • Societies Registration Act, 1860
    • Indian Trusts Act, 1882
    • Section 8 of the Companies Act, 2013
  • Minimum Operational History: The organization must have been operational for at least three years and have spent at least Rs. 10 lakhs on social causes during this period (excluding administrative expenses).
  • Capital Assets Usage: If the organization holds capital assets (e.g., land, buildings, or vehicles), the Chief Functionary must provide an undertaking that these assets will be used only for FCRA-related activities.