FCRA REGISTRATION IN INDIA

Full Documentary Guide & Professional Advisory Draft

 

1️⃣ WHAT IS FCRA?

The Foreign Contribution (Regulation) Act, 2010 (FCRA) regulates the acceptance and utilization of foreign contribution or foreign hospitality by individuals, associations, NGOs, and companies in India.

📌 Objective:
To ensure foreign funds do not affect national interest, public order, or sovereignty.

Foreign Contribution includes:

• Foreign currency

• Foreign securities

• Any donation from a foreign source (direct or indirect)

 

2️⃣ WHO NEEDS FCRA REGISTRATION?

Any organization intending to receive foreign donations for:

• Charitable

• Social

• Educational

• Religious

• Cultural

• Economic development activities

Eligible entities:

• Trust

• Society

• Section 8 Company

 

3️⃣ TYPES OF FCRA APPROVAL

🔹 A. FCRA REGISTRATION (Permanent)

• For NGOs with minimum 3 years of existence

• Must have spent ₹15 lakh on core charitable activities in last 3 years

• Valid for 5 years

🔹 B. FCRA PRIOR PERMISSION

• For new NGOs or specific foreign donor/project

• One-time approval

• Donor-specific & purpose-specific

📌 New NGOs usually start with Prior Permission.

 

4️⃣ INELIGIBLE PERSONS / ENTITIES

❌ Political parties
❌ Election candidates
❌ Judges, government servants
❌ Media organizations
❌ Individuals prohibited by government

 

5️⃣ KEY CONDITIONS FOR FCRA REGISTRATION

✔ Registered under Indian law
✔ Non-profit objective
✔ No adverse government records
✔ Proper governance structure
✔ Activities not religious conversion-oriented
✔ No prosecution or blacklisting

 

6️⃣ DOCUMENTS REQUIRED (VERY IMPORTANT)

📁 A. ORGANIZATION DOCUMENTS

• Registration Certificate (Trust / Society / Section 8)

• Memorandum & Rules / Trust Deed

• PAN of organization

• DARPAN ID (NITI Aayog – mandatory)

• Certificate of Incorporation (Section 8)

• 3 years activity report

• 3 years audited financial statements

 

📁 B. KEY FUNCTIONARY DOCUMENTS

(Chairman / President / Secretary / Director)

• Aadhaar Card

• PAN Card

• Passport (mandatory)

• Photograph

• Father / Spouse details

• Contact details

• Occupation & nationality declaration

📌 Even one missing passport → rejection.

 

📁 C. BANK ACCOUNT REQUIREMENTS (CRITICAL)

🔹 Mandatory FCRA Account:

• State Bank of India – New Delhi Main Branch

• Account purpose: FCRA Receipt Account

• No other bank allowed for receipt

🔹 Utilization Account:

• Can be opened in any scheduled bank

• Funds must first come to SBI Delhi, then transferred

 

7️⃣ STEP-BY-STEP FCRA REGISTRATION PROCESS

Step 1: Obtain DARPAN ID

Register NGO on NITI Aayog portal.

 

Step 2: Prepare Documents

• Activity proof

• Financial records

• KYC of office bearers

• Board resolution authorizing FCRA application

 

Step 3: Open SBI FCRA Account

• Online application through SBI portal

• Approval required before filing FCRA form

 

Step 4: File Online Application

• Form FC-3A (Registration)

• Form FC-3B (Prior Permission)

• Upload documents

• Pay government fee

 

Step 5: Background Verification

• IB & local police verification

• Physical inspection possible

 

Step 6: Grant of FCRA Certificate

• Issued electronically

• Valid for 5 years

 

8️⃣ POST-REGISTRATION COMPLIANCES

🔹 Annual Filing – FC-4

• Due by 31st December

• Includes:

  • Foreign contribution received

  • Utilization details

  • Bank statement

  • Balance carried forward

 

🔹 Intimation of Changes (FC-6)

Mandatory for:

• Change in office bearers

• Change of address

• Change of bank account

• Change in objectives

Timeline: Within 15 days

 

9️⃣ UTILIZATION RULES (STRICT)

✔ Funds to be used only for approved purpose
✔ No cash withdrawals beyond limits
✔ Separate books of accounts
✔ No speculative investments
✔ Interest earned = treated as foreign contribution

 

🔟 ADMINISTRATIVE EXPENSE LIMIT

• Max 20% of foreign contribution

• Includes:

  • Salaries

  • Office expenses

  • Professional fees

❌ Exceeding limit → violation.

 

1️⃣1️⃣ PROHIBITIONS UNDER FCRA

❌ Transfer of foreign funds to non-FCRA NGOs
❌ Sub-granting without approval
❌ Mixing domestic & foreign funds
❌ Political activities
❌ Religious conversion funding

 

1️⃣2️⃣ PENALTIES & CONSEQUENCES

Violations may lead to:

• Suspension of FCRA

• Cancellation of registration

• Freezing of bank accounts

• Heavy penalties

• Blacklisting

• Criminal prosecution

📌 Cancellation bars re-application for 3 years.

 

1️⃣3️⃣ FCRA RENEWAL

• Every 5 years

• Apply at least 6 months before expiry

• Same scrutiny as fresh registration

 

1️⃣4️⃣ COMMON REASONS FOR REJECTION

❌ Incomplete documents
❌ No proper activity proof
❌ Office bearers with adverse background
❌ Religious / political inclination
❌ Inconsistent financials
❌ Poor governance structure

 

📄 PROFESSIONAL ADVISORY DRAFT

(For CA / CS / Legal Firm Use)

ADVISORY NOTE – FCRA REGISTRATION & COMPLIANCE

This is to inform that acceptance of foreign contribution in India is governed by the Foreign Contribution (Regulation) Act, 2010. Any NGO, Trust, Society, or Section 8 Company intending to receive foreign donations must obtain prior approval or registration under FCRA from the Ministry of Home Affairs.

FCRA compliance involves:

• Determining eligibility (Registration vs Prior Permission)

• Opening designated SBI FCRA bank account

• Filing online application with complete disclosures

• Undergoing government background verification

• Maintaining strict post-registration compliances including annual filings

Non-compliance may result in suspension or cancellation of FCRA registration, freezing of funds, penalties, and prosecution.

Our firm provides end-to-end professional assistance including:

• Eligibility assessment & advisory

• Document preparation & verification

• DARPAN ID & SBI FCRA account assistance

• Filing of FCRA application & follow-up

• Annual FC-4 returns & ongoing compliance

• Advisory on utilization, reporting & renewals

Proper FCRA compliance ensures lawful receipt of foreign contributions, transparency, and long-term operational continuity.

 

1️⃣5️⃣ PRACTICAL COMPLIANCE TIPS

✔ Maintain digital records
✔ Avoid frequent changes in office bearers
✔ File NIL returns if no receipt
✔ Keep activity documentation ready
✔ Conduct internal FCRA compliance audit annually

 

✅ SUMMARY

This document covers:
✔ Legal framework
✔ Eligibility
✔ Documents
✔ Process
✔ Compliance
✔ Penalties
✔ Professional advisory

FCRA REGISTRATION & COMPLIANCE

CLIENT-READY CHECKLIST + COMPLIANCE CALENDAR

 

📌 PART 1: FCRA REGISTRATION CHECKLIST

(Use this before filing FC-3A / FC-3B)

🔹 A. BASIC ELIGIBILITY CHECK

✔ Entity is Trust / Society / Section 8
✔ Minimum 3 years existence (for Registration)
✔ Minimum ₹15 lakh charitable spend in last 3 years
✔ Clear non-profit objectives
✔ No political / religious conversion activity
✔ No adverse records against office bearers

 

🔹 B. MANDATORY PRE-REQUISITES

✔ PAN of NGO
✔ DARPAN ID (NITI Aayog)
✔ Active email & mobile linked to NGO
✔ Board / Trustee Resolution for FCRA

 

🔹 C. BANK ACCOUNT CHECK

✔ SBI New Delhi Main Branch – FCRA Receipt Account opened
✔ Utilization account identified
✔ No other foreign receipt account exists

📌 Without SBI account → application will not submit

 

🔹 D. DOCUMENT CHECKLIST

Organization
✔ Registration Certificate
✔ Trust Deed / MOA & AOA / Rules
✔ 3-year activity reports
✔ 3-year audited financials

Key Functionaries
✔ Aadhaar
✔ PAN
✔ Passport (mandatory)
✔ Photo
✔ Occupation & nationality declaration

 

🔹 E. ONLINE APPLICATION

✔ Correct form selected (FC-3A / FC-3B)
✔ Purpose & donor details clearly stated
✔ Documents uploaded properly
✔ Fee paid successfully

 

📌 PART 2: POST-FCRA COMPLIANCE CHECKLIST

✔ Separate books of accounts for FCRA
✔ Foreign funds used only for approved purpose
✔ Admin expense ≤ 20%
✔ Interest treated as foreign contribution
✔ No transfer to non-FCRA NGO
✔ Timely annual return filing

 

📅 PART 3: FCRA COMPLIANCE CALENDAR (VERY IMPORTANT)

Compliance	Due Date
FC-4 Annual Return	31 December every year
Change in office bearers (FC-6)	Within 15 days
Change of bank / address	Within 15 days
FCRA Renewal	6 months before expiry
Internal compliance review	Annually
Nil return (if no receipt)	Mandatory

📌 Late filing = penalties + scrutiny

 

⚠️ HIGH-RISK AREAS (CLIENT ALERT)

❌ Using foreign funds before approval
❌ Paying salaries without admin cap check
❌ Missing FC-4 even when no funds received
❌ Mixing domestic & foreign funds
❌ Changing trustees without intimation

 

🧠 PROFESSIONAL PRACTICE TIP

Most FCRA cancellations happen after registration, not at application stage — due to poor annual compliance.

FCRA – COMPLETE DOCUMENTARY, COMPLIANCE & ADVISORY GUIDE

 

1️⃣ FC-4 ANNUAL RETURN – STEP-BY-STEP PRACTICAL GUIDE

📌 What is FC-4?

FC-4 is the annual return to report:

• Foreign contribution received

• Utilization details

• Closing balance

📅 Due Date: 31st December every year
📌 Mandatory even if NIL foreign contribution

 

🔹 Documents Required for FC-4

✔ Audited Income & Expenditure Account
✔ Balance Sheet
✔ Receipt & Payment Account
✔ Bank statement of FCRA account
✔ Donor-wise details
✔ Purpose-wise utilization details

 

🔹 Filing Process

1. Login to FCRA portal

2. Select FC-4

3. Enter:

   • Opening balance

   • Foreign contribution received

   • Utilization

   • Closing balance

4. Upload financial statements

5. DSC / E-sign submission

 

⚠️ Common FC-4 Mistakes

❌ Mismatch with bank statement
❌ Interest not disclosed
❌ Admin expense exceeding 20%
❌ NIL return not filed

 

2️⃣ FCRA SOP (STANDARD OPERATING PROCEDURE)

📌 Objective

To ensure error-free utilization & compliance.

 

🔹 Internal Controls

✔ Separate FCRA ledger
✔ Separate vouchers
✔ Monthly bank reconciliation
✔ Expense approval hierarchy

 

🔹 Fund Utilization SOP

✔ Funds used only for approved purpose
✔ No cash payments beyond limits
✔ Salary structure reviewed under admin cap
✔ Quarterly internal review

 

🔹 Documentation SOP

✔ Donor agreement copies
✔ Utilization reports
✔ Beneficiary evidence
✔ Photographs & reports

📌 This SOP is extremely useful during MHA inspection.

 

3️⃣ FCRA RENEWAL – CHECKLIST & STRATEGY

🔹 Renewal Timeline

• Validity: 5 years

• Apply 6 months before expiry

 

🔹 Renewal Checklist

✔ No pending FC-4
✔ No violation notices
✔ Updated KYC of office bearers
✔ Active SBI FCRA account
✔ Clean utilization history

 

🔹 Strategic Renewal Tips

✔ Avoid trustee changes near renewal
✔ Clear old non-compliances beforehand
✔ File NIL returns consistently
✔ Maintain activity continuity

📌 Renewal scrutiny = fresh registration scrutiny

 

4️⃣ FCRA PENALTIES & CASE-BASED INSIGHTS

🔴 Common Violations

❌ Late FC-4 filing
❌ Admin expense >20%
❌ Transfer to non-FCRA NGO
❌ Purpose deviation
❌ Mixing domestic funds

 

🔹 Consequences

• Freezing of bank accounts

• Suspension (up to 180 days)

• Cancellation of FCRA

• Penalties & prosecution

• 3-year re-application ban

 

🧠 Practical Insight

Most cancellations happen due to:

• Poor documentation

• Ignoring NIL filings

• Frequent trustee changes

• Non-professional accounting

 

5️⃣ FCRA + CSR + INCOME TAX – COMBINED COMPLIANCE MAP

Area	CSR	FCRA	Income Tax
Governing Law	Companies Act	FCRA Act	IT Act
Registration	CSR-1	FCRA	12AB
Foreign funds	❌	✅	Neutral
Annual filing	CSR-2	FC-4	ITR-7
Audit	Statutory	Mandatory	Mandatory
Admin cap	5%	20%	Reasonable

📌 One error in one law impacts others.

 

6️⃣ HIGH-LEVEL COMPLIANCE CALENDAR (MASTER)

Compliance	Timeline
FC-4 filing	31 December
Change intimation (FC-6)	15 days
CSR-2	30 days from AGM
ITR-7	As notified
FCRA renewal	6 months before expiry

 

7️⃣ CLIENT FAQ – QUICK ANSWERS

Q: Can foreign funds be transferred to another NGO?
❌ No, unless permitted by MHA.

Q: Can salary be paid from FCRA funds?
✅ Yes, within 20% admin limit.

Q: Is interest taxable?
📌 Taxable under Income Tax, and treated as foreign contribution under FCRA.

Q: Can FCRA funds be invested?
❌ No speculative or risky investments.

 

8️⃣ BEST PRACTICES USED BY COMPLIANT NGOs

✔ Separate FCRA compliance officer
✔ Quarterly internal audit
✔ Digital document storage
✔ Conservative admin expense planning
✔ No last-minute filings

 

9️⃣ PROFESSIONAL ADVISORY – MASTER DRAFT

ADVISORY NOTE – FCRA REGISTRATION, COMPLIANCE & GOVERNANCE

Foreign Contribution in India is governed by the Foreign Contribution (Regulation) Act, 2010. Any organization intending to receive foreign donations must strictly comply with registration, utilization, reporting, and governance requirements prescribed under the Act.

FCRA compliance is not limited to registration alone but includes continuous annual reporting, proper fund utilization, internal controls, and timely disclosures. Non-compliance may result in suspension, cancellation, freezing of funds, penalties, and prosecution.

Our firm provides end-to-end professional services including FCRA registration, prior permission, annual FC-4 filings, renewal advisory, compliance audits, and regulatory representation, ensuring lawful receipt and utilization of foreign contributions.