Overview of FCRA Registration

The Ministry of Home Affairs in India grants Non-Profit Organizations an FCRA registration permit, which allows them to keep track of donations from foreign sources. To accept donations from outside parties, Section 8 corporations, charitable trusts, and registered charities must register under the Foreign Contribution Regulation Act (FCRA). When NGOs and charitable trusts are registered with the FCRA, it becomes simpler for them to transfer funds from foreign sources into their FCRA account. Indian non-profits that serve specific populations extensively and are judged to need support can apply for donations from foreign funding agencies.

The Objective of FCRA 2010

The Foreign Contribution Regulation Act, 2010 was passed in order to: ·Control the acceptance and use of foreign hospitality or contributions by specific associations or businesses;

Prohibit the acceptance and use of foreign hospitality or contributions for any kind of activity. Unfavourable to national interest and for matters related to therewith or incidental thereto.

Eligibility Criteria of FCRA Registration:

Income or assets owned by NGOs should only be used for charitable purposes.
The NGO should keep accurate books of accounts that include all income and outlays.
An organisation should not be founded to serve a specific religion, community, or caste.
Its primary goal should be to further charitable causes, and donations should provide for all of its funding.
In the event that the non-profit organisation generates revenue from its operations, the trustees of the organisation ought to uphold distinct accounting records to guarantee that donations are not misused.
An NGO needs to have operated for three years in order to be registered under the FCRA.

Benefits of FCRA Registration

The FCRA registration offers several benefits to non-profit organisations in India that intend to receive foreign contributions for their various programs. Some of them are discussed below:

Legal Recognition and Credibility:
FCRA registration provides legal status and credibility on both domestic and international platforms. It guarantees that the organisation can lawfully accept donations or contributions from overseas sources and that it conforms with national legislation.

Access to Foreign Funding:
An FCRA-registered organisation can access foreign individuals, agencies, and foundations. This provides opportunities for increased funding, which can significantly improve the capacity of an organisation to carry out and expand its operations.

Increased Trust from Donors:
Foreign and domestic donors are likely to have greater faith in an organisation that is FCRA-registered. This is because contributors are reassured that their money will be used responsibly by the registration's strict adherence to FCRA rules and regulations.

Tax Exemptions:
Organisations that have registered with the FCRA are entitled to certain tax advantages, such as Income Tax Act exemptions. These benefits can help allocate more funds to the organisation's goals.

Long-Term Sustainability:
Access to foreign funding can improve the long-term viability of non-profit organisations, especially when domestic funding sources are limited or unstable.

What is a Foreign Source?

The following are examples of foreign sources as defined by Section 2(1)(j) of the Financial Crimes Act of 2010:

Any foreign government and any agency thereof;
Any international agency, excluding the United Nations or any of its specialised agencies, the World Bank, the International Monetary Fund, or any other agency that the Central Government may designate in this regard by notification;
A corporation that is not a foreign company that is incorporated in a foreign country or territory;
A multi-national corporation mentioned in clause (g) subclause (iv);
A company as defined by the Companies Act, 1956, and more than half of the nominal value of its share capital is held, individually or collectively, by one or more of the following
The foreign country or territory's government;
The foreign country or territory's citizens;
Corporations incorporated abroad or in the territory;
Trusts, societies, or other associations of people (whether incorporated or not), established or registered in a foreign nation or territory; Foreign company;
A trade union operating in any foreign nation or territory, regardless of whether it is registered there;
A foreign foundation or trust, regardless of name, or a trust or foundation primarily funded by a foreign nation or territory;
A group of people organised or registered outside of India as a society, club, or other association;
A national of another nation. The following is a list of international agencies and multilateral organisations, including the World Bank and the United Nations, that are not considered "foreign sources."

Checklist of Documents to be Filed

A list of required paperwork for filing the following paperwork needs to be submitted in order to be registered:

A properly completed Form FC-8 in triplicate.
The three years' worth of audited financial statements.
An annual report detailing the actions of the previous five years.
A thorough description of the beneficiaries and the socioeconomic characteristics of the area the NGO works in.
The state's list, accompanied by a map of its districts that are suggested for work.
A certified duplicate of the Certificate of Registration.
A certified copy of the Articles of Association, Memorandum, and By-laws, if applicable.
A copy of the Income Tax Department's certificates of registration or exemption under sections 80G and 12A.
A copy of any earlier authorisation given to the company.
A copy of the organisation's governing body's resolution approving the FCRA registration.
A copy of the Governing Body's resolution authorising the Chief Functionary to submit FC-8 or a power of attorney copy.
A list of the current office holders and members of the organisation's governing body.
A copy of the organisation's journal or other publication.
The Ministry of Home Affairs file number and registration number of any parent, sister, or subsidiary organisations that the association has that are registered under the FCRA should be mentioned.
The reference number for any prior applications the association may have submitted should be stated.
The association should provide details if it has received any foreign contributions, with or without the Central Government's prior approval.

It should be noted that the association bears the responsibility for obtaining registration under the Fair Credit Reporting Act (FCRA). Consequently, the association must ensure that all necessary formalities are fulfilled and that registration is obtained prior to accepting any foreign exchange before accepting any foreign contributions.

Process of FCRA Registration in India

To register under FCRA, the organisation must have a DARPAN ID. For this ID, the organisation is required to register itself on the DARPAN portal as provided by the NITI Ayog.

To finish the FCRA registration process via the FCRA online services portal, follow the steps listed below:

Step 1: Go to fcraonline.nic.in, the official FCRA online portal.
Step 2: Select the application type. Choose Form FC-3A for FCRA registration and Form FC-3B for FCRA prior permission.
Step 3: Next, select "Apply Online" and set up a password and username
Step 4: Enter your credentials to log in to the website now. Following a successful login, a screen with the message "I am applying for" will appear; choose FCRA registration from there..
Step 5: Select the FC-3 Form, fill out all the fields, and attach the necessary files.
Step 6: The applicant also needs to complete these two options. From the menu bar, choose The Executive Committee. Please complete the Executive Committee form with these details. The applicant has the ability to modify, add, or remove details by entering "Add details of Key Functionary."
Step 7: Next, enter the bank's information, including its name, account number, IFSC code, and address.
Step 8: At this point, upload every document in PDF format. Write the location and date of the final submission as well.
Step 9: Complete the online payment at this point, being aware that once it is completed, no modifications will be possible.

Note: In accordance with the new FCRA 2010 regulations, the FCRA renewal procedure must be completed within five years. It can be completed online.

FCRA Compliance

Maintaining Proper Records:
Maintaining accurate documentation is essential to ensuring organisational transparency. All NGOs must maintain precise records of all the funds they receive and disburse. These records must be kept current in a specific way and made available for government review.

Submitting Annual Reports:
The MHA requires yearly reports from NGOs registered under the FCRA. The annual report should contain details about all foreign contributions that were used and received during the year. The report must be filed in the required format and certified by a chartered accountant (CA).

Utilisation of Foreign Contributions:
Foreign contributions should only be used by NGOs for the intended purposes. It is against the FCRA to use foreign contributions for purposes other than those for which they were intended.

Use of FCRA registration:
The use of FCRA registration means receiving foreign contributions is equally important to get it renewed. In case, your organisation has failed to secure any foreign funds for 2 years continuously [Ref Sec: 14(1)(e), FCRA, 2010] then the chances of its renewal become negligible. Most probably renewal will be refused by MHA due to inactivity.

Comply with the various provisions of FCRA:
The provisions under FCRA are quite strict, and the MHA is proactively monitoring compliance relating to the act. NGO management team should ensure that they comply with the provisions of the FCRA to avoid cancellation of registration. Most NGOs face problems in India due to ignorance and lack of professional services to them.

Penalties Under FCRA

Sections 33–39 of the act specify penalties for violations of the FCRA Registration's provisions or any rules made under. It includes comprehensive guidelines for fines and jail time based on the type of offence.

To guarantee responsibility and openness when handling foreign contributions, FCRA provides specific guidelines and regulations. In order to avoid severe penalties, it is crucial to abide by the FCRA requirements.

Why Aperio Fincraft?

Aperio Fincraft provides the best online FCRA services in India. We can help you with the following services to help you with the FCRA registration process:

Drafting documents,
filing applications,
processing applications and
finishing the FCRA certificate registration

In order to obtain the FCRA Registration in the shortest amount of time and for the lowest possible FCRA registration fees, please contact us. On their official website, you can also verify the status of your FCRA online registration.

Documents for Normal FCRA Registration

Documents for Prior Permission FCRA Registration:

Why Choose Aperio Fincraft?

Aperio Fincraft is a leading business platform and innovative idea that offers end-to-end incorporation, compliance, advising, and management consulting services to clients in India. Registering a Non-profit Organization under section 12AA is easy, seamless, cheapest and quickest with Aperio Fincraft . Apart from this, Aperio Fincraft also helps register trusts / NGOs / NPOs under section 80G(5)..

Frequently Asked Questions