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FCRA Registration in India: A Guide for NGOs
FCRA, or the Foreign Contribution Regulation Act, registration is essential for Indian NGOs, charitable trusts, and non-profit organizations that seek to receive foreign donations or funding. Governed by the Ministry of Home Affairs, FCRA was enacted in 2010 to regulate and ensure transparency in the receipt and utilization of foreign contributions by NGOs and to prevent any activities that might harm national interests. Organizations registered under FCRA are legally allowed to accept foreign funds, enabling them to support social, charitable, cultural, educational, and religious activities in India.
Purpose of FCRA Registration
The FCRA’s primary purpose is to ensure that foreign contributions received by Indian NGOs and organizations are used for lawful, transparent, and charitable purposes. With the increasing importance of global funding in supporting non-profit activities, FCRA registration becomes vital for NGOs seeking foreign support for projects like healthcare, education, environmental protection, disaster relief, and poverty alleviation.
Key Benefits of FCRA Registration
Legally Receive Foreign Donations
FCRA-registered organizations can receive donations from foreign individuals, institutions, and organizations legally and without restriction, provided they comply with the Act’s guidelines.
Enhanced Credibility and Reach
Organizations with FCRA registration are seen as credible and transparent, which can attract further foreign contributions and partnerships with international NGOs and foreign governments.
Greater Fundraising Potential
By opening avenues for foreign funding, FCRA allows NGOs to increase their fundraising capacity and sustain and expand their charitable initiatives.
Certificate Issuance
Upon approval, the Income Tax Department issues the 12A registration certificate, which must be retained for future compliance and verification.
Eligibility Criteria for FCRA Registration
To qualify for FCRA registration, an organization must:
1. Be registered as an NGO, trust, or society under relevant laws, such as the Societies Registration Act, Indian Trusts Act, or Section 8 of the Companies Act.
2.Have been in operation for at least three years with a proven track record of philanthropic work.
3. Have spent a minimum of ₹10 lakh (approx. $12,000) on social activities in the last three years (for regular FCRA registration). If an NGO is new, it can apply for prior permission to receive specific contributions for a defined project.
Types of FCRA Registration
1. Permanent FCRA Registration:
For NGOs that have been operational for at least three years and meet the eligibility requirements. This registration is valid for five years and needs periodic renewal.
2. Prior Permission Registration
For new NGOs or those with limited experience but seeking to receive foreign funds for specific projects. This registration is project-specific and does not grant the broad authority to accept foreign contributions.
FCRA Registration Process
1. Application Submission via Form FC-3:
Organizations must apply through Form FC-3 (available online on the Ministry of Home Affairs website). They can choose between the Regular Registration or Prior Permission categories.
2. Supporting Documentation:
Required documents include:
- Registration certificates and bylaws of the organization
- PAN of the NGO
- Audited financial statements and activity reports of the past three years
- Bank account details specifically designated for FCRA funds
3. Review and Approval by Ministry of Home Affairs:
12A and 80G registrations improve the NGO’s credibility, as compliance with tax norms enhances its reputation among donors and government bodies.
Compliance Requirements for FCRA-Registered Organizations
Once registered, organizations must follow strict compliance norms:
1. Annual Filing of Returns:
NGOs must file annual returns detailing the receipt and utilization of foreign funds via Form FC-4.
2. Designated Bank Account:
All foreign funds must be deposited in a dedicated FCRA-approved bank account.
3. Regular Audits and Transparency:
Regular auditing of FCRA funds is mandatory to ensure compliance and prevent misuse.