1. FCRA By, CA VIBIN VINCENT,FCA.DISA 11/09/2018
Foreign Contribution (Regulation) Act, 2010
By, CA VIBIN VINCENT,FCA.DISA
11/09/2018

3. A national Security legislation
An act to regulate the acceptance and utilization of foreign contribution or foreign hospitality by certain persons or associations
Governed by Ministry of Home Affairs

4. FOCUS
Facilitate receipt of Foreign Contribution for genuine purpose without compromising National security concerns

5. Foreign Contribution (FC)
Donation, delivery, transfer made by a ‘Foreign Source’ of,
Any Article
Any Currency – Indian or Foreign
Any Security
Clarification:
‘Fee for services’ is NOT FC FUNDS
Amount received by a person in the ordinary course of his business, trade or commerce whether in India/outside India is NOT FC.

6. IS GIFT RECEIVED FROM A FOREIGN SOURCE A FOREIGN CONTRIBUTION?

7. FC, whether received in Indian or foreign currency
Form of Gift
FC/Non FC
CURRENCY
FC, whether received in Indian or foreign currency
SECURITY(Shares, bonds, debentures) FC
ARTICLE
Non FC – if,
Article given to
Individual
HUF
Section 25 Company
AND
Market Value of gift on the date of such gift does not exceed Rs 25,000/-. (Earlier limit – Rs 1000/-)

8. Are remittances from relative FC?
FC but no requirement of registration/prior permission.
Receipt of FC of Rs 1,00,000/- or more in a FY - inform Central Government in FORM FC-1 within 30 days from date of receipt.

9. FOREIGN SOURCE

10. Foreign Source (FS) FS includes: FOREIGN Government Company
Corporation
Trade Union
Society, club, other association
Citizen

11. Foreign Source (FS) FS includes: INTERNATIONAL AGENCY not being UN
Multi national corporation registered outside india
Indian company, if more than 50% of the nominal value of its share capital is held by
Foreign govt./Co./Corporation/citizen/trust/society/association of person

12. IS DONATION FROM NRI A FOREIGN CONTRIBUTION?

13. Is donation by NRI FC? Donation by Born in India lives outside India
NRI (Non Resident Indian)
Non FC – If holds valid Indian Passport and donates from his personal savings through normal banking channels
PIO/OCI Card Holders
FC – Since does not hold valid Indian Passport
* CHECK IF HOLDS VALID INDIAN PASSPORT

14. Who can/cannot receive FC?
CAN RECEIVE FC
CANNOT RECEIVE FC
Person defined under 2(1)(m)
Has a definite cultural, economic, educational, religious or social programme
Obtained Prior Permission/Registration
Associated with Registered Newspaper, production/broadcast of news
Judge/Government Servant
Organisation/individual associated with Politics
Other individuals/associations prohibited
BUT THEY CAN BE ON BOARD OF AN ORG

15. REGISTRATION/PRIOR PERMISSION

16. ELIGIBITY CRITERIA REGISTRATION Registered Legal Entity
Existence for at least 3 years
Spent at least Rs 10,00,000/- over the last 3 years(excluding administrative expenses)
Apply online through unique ID obtained by registering in NGO-DARPAN plat form
PRIOR PERMISSION
Submit donor commitment letter, justification for proposed project

17. Renewl of registration
Valid for a period of five years only
The application for renewal is to be made online in Form FC-3 along with the prescribed fee, six months before the date of expiry of the certificate of registration
On failure, validity of registration deemed to have ceased from the date of completion of the period of five years from the date of the grant of registration.

18. Can Co/Firm apply for Regn/PP?
YES, a Company/Firm may apply incase it wants to do some charitable work.
An individual and HUF is also eligible to apply for Registration/PP
*Person defined to include individual, HUF, association, Section 25 Co.
*Association means association of individuals whether incorporated or not

19. Clarifications through Notifications/Circulars/FAQs

20. IMPORTANT CLARIFICATION
FC should only be received in the ‘FC Designated Bank Account’. However, the one or more accounts may be opened for utilising the FC. Inform MHA within 15 days of a/c opening.
INTER ACCOUNT FUND TRANSFER NOT ALLOWED (FAQ No 21).

21. IMPORTANT CLARIFICATION
‘Administrative Expenses’ has been defined (Rule 5)
Expenses like interest paid to bank, bank charges, hospitality cannot be considered as Administrative Expenses.

22. IMPORTANT CLARIFICATION
A registered person may transfer FC Funds to an Unregistered Person provided:
Not more that 10% of the total value of FC is transferred
Application is made to the Central Government in FORM FC 10
No transfer is made until approval received
Both transferor and transferee to ensure proper utilisation

23. IMPORTANT CLARIFICATION
INFUSION OF SHARE CAPITAL IN A NOT-FOR- PROFIT CO. (A SECTION 25 COMPANY) IS TREATED AS FC.

24. Other Clarifications:
NO BAR IN RECEIVING FC IN INSTALLMENTS -Aggregate amount should not exceed specified amount for which PP obtained.
FILE ANNUAL RETURN EVEN IF NO UTILISATION – Under PP Mode, file Return till the time funds are totally consumed.

25. Other Clarifications:
ORG. WITH FOREIGN NATIONALS ON BOARD NOT PERMITTED TO RECEIVE FC. However, they may appointed with CG approval if the foreign national is:
married to Indian citizen
Living/working in India for at least 5 years
Voluntarily involved in India in medical/health related field
Part of Board in ex-officio capacity of exempt org/inter-governmental agreement

26. Other Clarifications:
Interest/other income earned out of FC funds should be shown as second/subsequent FC in the Annual Return during the year in which it is earned.
NGO’s can make secure investments and Fixed Deposits which ensures FIXED RETURN but cannot invest in speculative investments.

27. Penalties for violation
Whoever accepts, or assists any person, political party or organization in accepting any foreign contribution or any currency from a foreign source, in contravention of the provisions of the Foreign Contribution (Regulation) Act, 2010, or the rules made there under, shall be punished with imprisonment for a term which may extend to five years, or with fine or with both.

28. Penalties for Non filing of Returns
Offence
Penalty
Non-furnishing of FCRA return upto 90 days after 31stDecember every year
Penalty of 2% of the amount received during the Financial year or Rs.10,000/-, whichever is higher.
Non-furnishing of return after 91 days upto 180 days after 31stDecember every year
Penalty of 3% of the amount received during the Financial year or Rs.20,000/-, whichever is higher.
Non-furnishing of return after 180 days after 31st December every year
Penalty of 5% of the amount received during the Financial year or Rs.50,000/-, whichever is higher, with Rs. 500/- per day of delay after 180 days.

29. Compounding of offences
Penalty
Acceptance of cheque or draft towards foreign contribution by a ‘person’ without registration or prior permission of the Central Government even in cases where the cheque or draft has not been deposited in a Bank 
Rs. 10,000/- or 2 per cent of the foreign contribution involved, whichever is higher..

30. Compounding of offences
Penalty
Acceptance of cheque or draft by a ‘person’ towards foreign contribution without registration or prior permission of the Central Government and depositing the same in a Bank notwithstanding non-utilisation of the amount of the foreign contribution 
Rs. 25,000/- or 3 per cent of the foreign contribution involved, whichever is higher.

31. Compounding of offences
Penalty
FC Received and inquiry which revealed that the FC received was used for the purpose for which the same was received, within the objectives of the organisation and records of receipt and utilisation have been kept properly
Rs. 1,00,000/- or 5 per cent of the foreign contribution involved, whichever is higher.

32. Compounding of offences
Penalty
Acceptance of foreign contribution in kind by a ‘person’ without registration or prior permission of the Central Government notwithstanding that nothing adverse was reported after inquiry
Rs. 10,000/- or 2 per cent of the foreign contribution involved, whichever is higher.

33. Latest Developments in FCRA
Association registered under FCRA or obtained prior permission shall incur expenditure above Rs.20,000/- only through A/c payee cheque or drafts

34. Latest Developments in FCRA
Under PFMS, the banks are required to integrate their system with the Government PFMS which will enable the FCRA Department to track transactions online.

35. Only 32 banks in the country have integrated their systems with PFMS.
Latest Developments in FCRA
Only 32 banks in the country have integrated their systems with PFMS.
 FCRA Department has directed all the FC registered organisations to shift their bank accounts to one of the 32 notified banks

36. CHARTER for CAs
CAs are requested to get themselves thoroughly familiarised with FCRA, 2010 and the Foreign Contribution (Regulation) Rules, 2011 (FCRR, 2011), amendments and notifications issued from time to time so that they can help the associations

37. CHARTER for CAs
To verify whether the associations are eligible to receive foreign contribution.
To guide the applicant organization in submission of application for registration/prior permission

38. CHARTER for CAs
Ensure that the association receives and utilises the foreign contributions through its bank account exclusively opened for the purpose in accordance with the provisions of FCRA, 2010 and FCRR, 2011 and that foreign contribution is not deposited or utilised from the bank account being used for domestic funds

39. CHARTER for CAs
To assist in the proper maintenance of prescribed books of accounts in accordance with the provisions of FCRA, 2010 and FCRR, 2011
To ensure that the annual returns of an association have been prepared in accordance with the provisions of FC(R) Act, 2010 and FCRR, 2011 as amended from time to time.

40. CHARTER for Orgonisations
FC received shall utilise only in India.
FC in the form of Fixed asset or kind shall be in the name of organisation registered.
Not more than 50% of the foreign contribution shall be defrayed to meet administrative expenses of the association

41. CHARTER for Orgonisations
Association should maintain a separate set of accounts and records, exclusively for foreign contribution received and utilised.
Intimation through Form FC-1 for articles/ foreign securities.

42. CHARTER for Orgonisations
Audited FS shall be uploaded in the official website or Govt. website by 31st Dec. every year.
Even if no FC is received during a year, a ‘Nil’ return is required to be filed online
However, certificate from Chartered Accountant or I&E statement or R&P account or balance sheet is not required to be uploaded.

43. CHARTER for Orgonisations
Quarterly details of FC receipts shall be uploaded in their website within 15 days following the last day of quarter
Intimate above 50% change in office bearers and any change in name, address, nature of activities etc.

44. CHARTER for Banks
Obtain certificate of registration/prior permission from the Central Government before crediting any FC to the account of an association
In case any FC is credited without registartion/PP, to the account of an Association directly, the bank should not allow utilization of such fund

45. CHARTER for Banks
inform concerned association and the Director/ Deputy Secretary (FCRA), Ministry of Home Affairs, Govt. of India, New Delhi about such receipt. Non-compliance of the above by the bank will constitute a violation and will render the defaulting bank liable for appropriate action by the Reserve Bank of India.

46. CHARTER for Banks
Every bank or authorised person in foreign exchange shall report to such authority as may be specified- (a) prescribed amount of foreign remittance; (b) the source and manner in which the foreign remittance was received; and (c) other particulars.

47. CHARTER for Banks
The bank shall report to the Central Government within forty-eight hours any transaction in respect of receipt or utilization of any foreign contribution by any person whether or not such person is registered or granted prior permission under the Act.”

48. ?
QUESTIONS PLEASE

49. THANK YOU!