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Foreign Contribution (Regulation) Act (FCRA)

Why is it in the news?

  • Recently, the Ministry of Home Affairs (MHA) has amended rules for NGOs and associations related to foreign contributions.

More about the news

  • The Foreign Contribution (Regulation) Rules Amendment Rules, 2023, have introduced new additions to the existing rules.
  • These rules have been in existence since 2011 and were last amended in 2022.
  • NGOs must register under the Foreign Contribution (Regulation) Act (FCRA) to receive foreign funds and are required to declare details of assets by March 31 of the financial year.
  • The details required to be filled in a form are — description of the assets, size and location of the immovable asset such as land, building etc, value of the movable assets at the beginning of the financial year, value of assets acquired and disposed during the financial year, and value of movable and immovable assets as per the balance sheet at the end of the financial year.
Foreign Contribution Regulation Act (FCRA)

About

·       Enacted in 1976 during the Emergency period.

·       Aims to regulate foreign donations to individuals and associations to ensure they align with India’s democratic values.

·       Subject to amendments in 2010 and 2020, tightening government control over foreign fund receipt and utilization by NGOs.

Criteria for FCRA Registration

·       NGOs and individuals receiving foreign donations must be registered under the Act.

·       Must have a dedicated bank account with State Bank of India, Delhi for foreign fund receipt.

·       Funds must be used only for the specified purpose and in accordance with the Act.

·       Eligible organizations must have cultural, economic, educational, religious, or social programs.

·       Applicants must not be fictitious or involved in activities promoting religious conversion, communal tension, sedition, or disharmony.

Exceptions: FCRA prohibits foreign funding for election candidates, journalists, media companies, judges, government officials, political parties, and political organizations.

 

Validity and Cancellation

·       FCRA registration is valid for 5 years, renewable within six months of expiry.

·       Registration can be cancelled if an NGO violates the Act, remains inactive for two consecutive years, or becomes defunct.

·       A cancelled NGO can reapply for registration after a three-year waiting period.

FCRA 2022 Rules

·       In July 2022, changes to FCRA rules included increasing compoundable offenses from 7 to 12.

·       Exemption from government intimation for foreign contributions under Rs 10 lakh (previously Rs 1 lakh) received from relatives abroad.

·       Extension of the time limit for intimation of opening bank accounts.

 

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