Organizations working for social and environmental causes often receive contributions and donations from foreign sources. However, whenever it comes to foreign exchange, the government acts as a watchdog to prevent any irregularity and ensure transparency. Therefore, in a bid to regulate foreign contributions, the government introduced Foreign Contribution Regulation Act, 2010. Any entity receiving foreign contributions shall obtain FCRA registration or prior permission. What is the FCRA registration process and associated compliance requirements? Let’s find out!
FCRA Registration and Prior Permission Process
An entity can either go for FCRA registration or prior permission for receiving the foreign contribution. However, it needs to determine whether it fulfills the eligibility criteria before filing the application. For obtaining FCRA registration, the entity needs to file an application online in Form FC-3A. For obtaining prior permission, the applicant shall file Form FC-3B.
The core difference between FCRA registration and prior permission is that FCRA registration is valid for a period of 5 years after which it shall be renewed. The FCRA registration renewal application shall be filed in Form FC-3C at least 6 months before the expiry of the registration.
Whereas, FCRA prior permission shall be valid for the foreign contribution received from a specific source for a specific purpose only. Therefore, it can be said that while FCRA registration is for a period of 5 years, FCRA prior permission is a one-time approval that shall be obtained again if the purpose or source changes.
FCRA Registration Compliances
Once an entity obtains FCRA registration or prior permission, it shall become eligible to receive foreign contributions.
Further, it needs to adhere to certain FCRA compliances that include:
- The entity shall intimate to the Central Government about the amount, source, manner and purpose for which it received the foreign contribution.
- The entity shall maintain a separate set of accounts for foreign contributions received and utilized.
- A statement of foreign contribution shall be submitted duly certified by an officer of the bank or authorized person in foreign exchange.
- It shall file the Annual Return in Form FC-4 along with the scanned copies of the Income and Expenditure Account, Receipts and Payments Account and Balance Sheet within 9 months from the close of the financial year.
- If the foreign contribution is received in the form of an article or foreign securities, then an intimation shall be received in Form FC-1.
Obtaining FCRA registration or prior permission is mandatory before receiving any foreign contribution. In case you need any assistance with respect to obtaining FCRA registration process, prior permission or compliances, feel free to contact the ASC Group.
