Solutions
FCRA Advisory and Compliance
Since the Foreign Contribution (Regulation) Act, 2010 (FCRA, 2010) is national security legislation; associations are required to exercise extreme care and caution in dealing with foreign contribution from the time of its receipt to its final utilization. As the Chartered Accountants audit the accounts of the associations and certify the accounts before submission to the Government, they are required to provide proper guidance to the associations who is either applying for grant of prior permission/registration or who have been granted prior permission/registration under FCRA, 2010. The Chartered Accountants should be thoroughly familiarized with FCRA, 2010 and the Foreign Contribution (Regulation) Rules, 2011 (FCRR, 2011) so that they can help the associations.
Eligibility criteria for grant of registration:
For grant of registration under FCRA, 2010, the association should:
- be registered under an existing statute like the Societies Registration Act, 1860 or the Indian Trusts Act, 1882 or Section8 of Companies Act, 2013 etc;
- Normally be in existence for at least three years and has undertaken reasonable activityinitschosenfieldforthebenefitofthesocietyforwhichtheforeigncontribution is proposed to be utilized.
- have spent a minimum of Rs. 10,00,000 in the last 3 years towards achieving its objectives (Excludes administrative expenditure).
- have spent a minimum of Rs. 10,00,000 in the last 3 years towards achieving its objectives (Excludes administrative expenditure).
- obtain a Darpan ID from NITI Aayog portal.
Compliance requirements:
- FCRA Bank Account for receipt of foreign contribution:
As per Foreign Contribution (Regulation) Amendment Act, 2020, every entity applying for FCRA registration shall open and FCRA Account at specified branch (New Delhi Main Branch) of State Bank of India in New Delhi. - Obtain a Darpan ID from Niti Aayog Portal
Before applying for FCRA registration, every entity needs to obtain a Darpan ID from Niti Aayog Portal. The said Darpan ID can be obtained online by filing the application form on Niti Aayog Portal. - FCRA Registration
Once Darpan ID is obtained, the entity can apply for FCRA registration on FCRA website by filing application form FC-3A. - Maintenance of separate accounts of FCRA and audit of the said FCRA Accounts
Every entity registered under FCRA needs to maintain separate accounts of FCRA and needs to prepare the balance sheet and receipt & payment account. The entity shall get the audit of said accounts from a Chartered Accountant. - Intimation of Quarterly Receipt of Foreign Contribution
The entity receiving foreign contribution in a quarter of a financial year is required to intimate online the details of foreign contribution received within 15 days following the last day of the quarter in which it has been received, clearly indicating the following details of amount received as foreign contribution. - Filing of annual FCRA returns
The return is to be filed online for every financial year (1st April to 31st March) within a period of nine months from the closure of the year i.e. by 31st December each year. Submission of a ‘NIL’ return, even if there is no receipt/utilization of foreign contribution during the year, is mandatory. The return is to be submitted, in prescribed Form FC – 4, duly accompanied with audited FCRA accounts and other required documents. - Intimation for change of Association name / Address / FC Recipient Bank / Utilization Bank
Accounts/ Key Members
Whenever there is a change in the entity with respect to name, address, bank accounts and key members, the entity is required to intimate the said changes to the authorities by filing Form FC 6 form.
DON’T’S:
- Do not mix Foreign Contribution with Domestic Receipts
- Do not approach Middlemen
- Do not deviate from the Purpose of the Grant
- Do not use ATM or Debit Cards
- Do not encourage cash withdrawals
- Do not invest FC funds in Mutual Funds or Speculative Investments
- Do not accept foreign hospitality while visiting abroad (Sec.6)
- Do not transfer FC funds to other Associations (Sec.7)
- Do not utilize foreign contribution for administrative purpose (Sec.8)
- Do not accept foreign contribution without prior permission or having a certificate of FCRA Registration (Sec.11)
- Do not receive or utilize foreign contribution if certificate of registration is ceased and is not renewed
- Do not accept foreign contribution during suspension of FCRA registration (Sec.13)
- Do not accept foreign contribution during cancellation of FCRA registration (Sec.14)
- Do not accept foreign contribution in undisclosed bank account (s)(Sec.17)
- Do not avoid filing mandatory FC annual returns in electronic form (Sec.18)
- Do not indulge in making of false statement, declaration or delivering false accounts(Sec.33)
- Do not deliver any article or currency or security obtained in contravention of section10(Sec.34)
- Do not act in contravention of any pro vision of the FCRA,2010(Sec.35)
Services offered:
- Maintenance of books of accounts for FCRA separately
- Conducting audit of FCRA accounts
- Application for FCRA registration
- Application for renewal of FCRA registration
- Application for prior permission
- Filing of FCRA Annual returns
- Filing of Intimation of Quarterly Receipt of Foreign Contribution by Associations
- Filing of FC forms for change of Association name / Address / FC Recipient Bank / Utilization Bank Accounts/ Key Members
- Obtain a Darpan ID from Niti Aayog Portal