Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
What it allows
Legal receipt of foreign contributions by an NGO.
MHA, separate from tax registration
FCRA is granted by the Home Ministry, distinct from 12AB/80G.
What counts as foreign contribution, and the duties
FCRA matters because ‘foreign contribution’ is defined broadly — money, goods or securities given by a foreign source, which includes foreign governments, foreign companies and citizens, and even Indian-origin individuals holding foreign citizenship. Receiving any of that for a definite programme without FCRA registration or prior permission is an offence. Registration is granted by the Ministry of Home Affairs and is entirely separate from the income-tax 12AB and 80G registrations, so a trust can be tax-exempt yet still barred from taking foreign money until it has FCRA. With registration come strict operating duties: all foreign contributions must be received into a single designated FCRA account at the State Bank of India’s New Delhi main branch, kept separate from domestic funds, with utilisation accounts as needed; the funds can be used only for the registered purposes; administrative-expense limits apply; and sub-granting foreign funds to other organisations is restricted. The annual return in Form FC-4 is mandatory, even in a nil year. Registration is itself time-bound and renewable. So FCRA is a compliance-heavy regime, and an NGO planning to seek foreign grants should set up the designated account and systems before the first receipt. Confirm the current rules, which have been tightened in recent years.