FCRA Registration & Annual Compliance

Foreign Contribution (Regulation) Act, 2010, as amended by the Foreign Contribution (Regulation) Amendment Act, 2020: Section 8 caps administrative expenses that may be defrayed out of foreign contribution at 20% of the contribution received in a financial year (reduced from the earlier 50% cap). Section 7 prohibits any FCRA-registered person from transferring foreign contribution to any other person, including another FCRA-registered entity — sub-granting to both unregistered and registered entities is barred. Section 11 requires every FCRA registration or prior-permission applicant to furnish the Aadhaar number of all office-bearers, directors, and key functionaries (or a passport/OCI card copy for foreign nationals) as a mandatory KYC condition. Section 17 mandates that all foreign contribution be received only in a designated FCRA account opened with the State Bank of India, New Delhi Main Branch, before being transferred to other accounts for utilisation. The Supreme Court, in Noel Harper v. Union of India (2022), upheld the constitutional validity of these 2020 amendments, including the SBI-account mandate, the sub-granting prohibition, and the Aadhaar-KYC requirement, rejecting challenges that they impermissibly restricted the right to receive foreign contribution.

FCRA registration is the legal gateway for receiving foreign contributions in India. Under the Foreign Contribution (Regulation) Act 2010, an association — a trust, society or Section 8 company — that wishes to receive foreign contribution must be registered under Section 12 of the Act, or obtain prior permission under Section 11 for a specific contribution. Registered associations must use a designated FCRA bank account, apply for renewal within the prescribed window, and file the annual return in Form FC-4 under Section 18 with the accounts of all foreign contributions received and used.

The registration is the licence that donors abroad look for before sending money. A foreign donor — an overseas foundation, an individual, an international NGO — will not fund an Indian organisation that cannot show FCRA registration, because the receipt would be unlawful under the Act. Registration also carries conditions: the association's objects must be the permitted ones, the funds must be used only for those objects, and the accounts must reconcile with the Form FC-4.

The cost of receiving foreign money without registration is severe — the Act treats the receipt of foreign contribution without registration as a contravention with significant consequences, including the forfeiture and penalty provisions of the Act (VERIFY: the penal provisions of the FCRA 2010 applicable to unregistered receipt of foreign contribution). The compliance is also continuous: the annual return, the renewal, the designated account and the restrictions on the use of funds.

This service is for NGOs, trusts, societies and Section 8 companies receiving or seeking foreign contributions. We advise on the FCRA 2010 requirements, prepare and file the registration application under Section 12 or the prior permission under Section 11, set up the designated account and the record-keeping, file the annual Form FC-4 return under Section 18, manage renewals, and keep the organisation compliant with the Act's conditions.