Corporate Law Income Tax

FCRA Registration by Charitable Organisation for Foreign Donation

CA Adityavikram Banka

FCRA Registration for NGOs

The Ministry of Home Affairs grants the FCRA registration as authorization to regulate foreign donations received by Indian nonprofit organisations. You must register with the Foreign Contribution Regulation Act if you are a registered NGO, charitable trust, or section 8 company and want to receive donations from abroad.

Charitable trusts and NGOs can receive funds from foreign sources into their FCRA account with the aid of registration under the FCRA. The Foreign Funding Agencies will donate money to non-profit organisations in India that on a significant scale are providing essential help to particular categories of people.

Continue reading to find out everything you need to know about the FCRA, foreign contributions, and registering your organisation with the FCRA.

What is FCRA

Foreign Contributions Regulation Act is referred to as FCRA. It is a law that controls how contributions from abroad may be accepted. Before collecting any funding from outside India, organisations are required by law to register with the state department.

In order to control the flow of foreign donations to NGOs and charitable organisations in India, the Foreign Contribution Regulations Act was created in 1976.

Criteria for FCRA registration?

  • The Association needs to meet the requirements listed below in order to register under the Foreign Contribution Regulation Act (FCRA):
  • The Association must be a non-profit organisation and registered under one of the Indian societies laws in order to comply with the FCRA registration requirements:
  • the Indian Trusts Act of 1882, the Indian Societies Registration Act of 1860, or Section 25 of the Companies Act of 1956
  • Before submitting an application for FCRA registration, the Association must have been established with a dedication to social advancement in India and must have been in existence for three years.
  • The Organization must have spent at least Rs. 15 Lakh on its primary operations for the benefit of society over the course of the previous three fiscal years in order to be eligible for FCRA registration.
  • To prove that it complies with these financial requirements, statements of income and expenditure that have been properly audited by chartered accountants must be presented.
  • At least 80% of the foreign donation must have gone toward the organization’s essential tasks. The amount of money that can be used for administrative costs is 20% maximum. Any administrative costs that exceed 20% must receive central government approval.
  • NGOs that receive annual foreign donations of more than Rs. 15 lakhs must register with the FCRA.
  • NGOs must first acquire approval from the Ministry of Home Affairs in order to accept foreign donations totaling more than Rs. 1 crore annually.

Documents required for FCRA registration

The following documents are required To register your NGO under the Foreign Contribution Regulation Act (FCRA),

Normal FCRA Registration

  • Registration Certificate of Association
  • Memorandum of Association/ Trust Deed
  • The audited statement of accounts for the last three years
  • Activity Report for the last 3 years.
  • NGO Darpan ID from the NITI Aayog portal
  • Adhaar Card of all the office bearers

Prior Permission FCRA Registration

  • Registration Certificate of Association
  • Memorandum of Association/Trust Deed
  • Darpan ID from the NITI Aayog portal
  • Adhaar Card of all the office bearers
  • Commitment letter from the donor organization and agreement
  • Project report for which FC will be received

Conclusion

An NGO is supposed to serve people in need. Non-profit organizations need a surplus amount of funds to help people. To help with that, The government introduced FCRA registration that helps an organization to receive donations from foreign funding agencies and utilize them for welfare of the society

CA Adityavikram Banka
Latest posts by CA Adityavikram Banka (see all)