What is FCRA Registration?
FCRA registration is permission under the Foreign Contribution (Regulation) Act, 2010 for an organisation to accept foreign contributions. An organisation with a track record applies for registration; one without applies for prior permission for a specific donor and purpose. All foreign contributions must first be received in a designated account at the State Bank of India, New Delhi Main Branch.
Who needs it
- Trusts, societies and Section 8 companies that intend to receive donations or grants from foreign sources.
- Organisations that have been offered a specific foreign grant but have no track record, who need prior permission.
- Existing FCRA holders approaching the end of their five-year validity, who must apply for renewal.
- FCRA holders who have changed their name, address, office bearers or bank account and must report it.
- Organisations that received foreign contributions without registration and need advice on regularising the position.
- Organisations whose registration has been suspended or cancelled.
Benefits
- The right route identified, since registration and prior permission have different conditions and consequences.
- Eligibility tested against the conditions before an application is made, including the track record and expenditure requirements.
- The designated account at the specified branch opened correctly, with the utilisation account arrangement in place.
- Annual returns in Form FC-4 filed with the audited schedules the Act requires.
- Renewal applications made before expiry, so the ability to receive and utilise funds is not interrupted.
- Changes reported in the prescribed form within the periods allowed.
Key facts
| Item | Position |
|---|---|
| Governing law | Foreign Contribution (Regulation) Act, 2010, as amended in 2020, with the FCRA Rules |
| Administering ministry | Ministry of Home Affairs, through the FCRA portal |
| Registration | For organisations with the prescribed track record; valid five years |
| Prior permission | For a named donor, amount and project, where the track record is absent |
| Designated account | A specified account at the State Bank of India, New Delhi Main Branch |
| Utilisation account | Permitted at a bank of the organisation's choice, for actual use of funds |
| Annual return | Form FC-4 by 31 December, including a nil return |
| Renewal | In the prescribed form, at least six months before expiry |
Registration or prior permission?
This is the first question, and the answer is dictated by the organisation's record rather than by preference.
| Registration | Prior permission | |
|---|---|---|
| Who it suits | An organisation with the prescribed years of existence and expenditure on its objects | A newer organisation, or one without the required expenditure record |
| Scope | Foreign contributions generally, for the stated objects | A specific donor, a specific amount and a specific project |
| Validity | Five years, renewable | Until the sanctioned amount is received and utilised for that project |
| Application form | The form prescribed for registration | The form prescribed for prior permission, with the donor's commitment letter |
| Practical effect | The organisation can plan around foreign funding | Each new grant needs a fresh application |
What changed with the 2020 amendments?
The amendments made in 2020 were the most significant change to the framework since the Act was passed, and an organisation working from older guidance will get several things wrong.
- Every foreign contribution must be received first in a designated account at the specified State Bank of India branch in New Delhi
- Transfer of foreign contributions to any other person or organisation was prohibited in the terms the amended provision sets out, ending the practice of sub-granting to implementing partners
- The proportion of foreign contributions that may be spent on administrative expenses was reduced
- Aadhaar identification of office bearers and key functionaries became part of the application requirements
- The Ministry's powers to summarily suspend a registration and to conduct enquiries were widened
- Certain categories of public servant were brought within the prohibition on accepting foreign contributions
The prohibition on transfer has had the widest practical effect. Programmes that were built on a large registered organisation receiving funds and passing them to local partners have had to be redesigned so that either each partner holds its own registration and receives directly, or the registered organisation itself carries out the work with the partner engaged on a different basis.
What does the designated account arrangement mean in practice?
There are two accounts doing two different jobs. The designated FCRA account at the specified branch is the only account into which a foreign contribution may be received; nothing else may be credited to it and it is not used for day-to-day payments. A utilisation account, which may be at any bank the organisation chooses, receives transfers from the designated account and is used for actual expenditure on the programmes.
Two consequences follow. First, the designated account has to be opened before any funds are expected, and opening it is not instantaneous, so the timetable for a grant has to allow for it. Second, domestic donations must never enter either account: foreign contributions are kept in separate accounts and separate books throughout, and a single domestic credit into the designated account is a compliance problem rather than a bookkeeping one.
Example: a first foreign grant, step by step
The sequence below is illustrative. An organisation with three years of activity is offered a grant by an overseas foundation. Because it has the track record, it applies for registration rather than prior permission, but the first practical step is opening the designated FCRA account at the specified State Bank of India branch in New Delhi, which takes time and cannot be hurried once a grant is promised. Registration is granted and runs for five years. The foundation remits the grant, which must arrive in that designated account and nowhere else; a well-meaning transfer to the organisation's existing current account is a contravention, not a bookkeeping error, and cannot be corrected by moving the money afterwards. Funds are then transferred from the designated account to a utilisation account at the organisation's own bank for actual spending. Separate books are kept from the first receipt, administrative expenditure is tracked against the permitted proportion through the year rather than computed at the year end, and Form FC-4 is filed by 31 December for the year ended 31 March — including in a later year when no foreign contribution is received at all, when a nil return is still due.
The annual compliance cycle
Registration brings a recurring set of obligations, and the ones most often missed are the nil return in a year with no receipts and the renewal application six months before expiry.
- Maintain separate books of account for foreign contributions, distinct from domestic funds
- Have the foreign contribution accounts audited for the financial year
- File Form FC-4 by 31 December with the audited schedules, including a nil return for a year with no receipts
- Publish the quarterly disclosure of foreign contributions received on the organisation's website as the Rules require
- Keep administrative expenditure within the permitted proportion, measured as the Rules define it
- Report any change of name, address, objects, office bearers or bank account in the prescribed form within the period allowed
- Diarise the five-year expiry and apply for renewal at least six months before it
Related reading
- 12A and 80G registration — income tax exemption, applied for before FCRA in most cases
- Trust registration — forming the entity that applies
- CSR-1 registration — the domestic corporate funding route
Official sources
- FCRA portal, Ministry of Home Affairs — applications, forms FC-3A, FC-3B, FC-3C, FC-4 and FC-6
- Ministry of Home Affairs — the Act, the Rules and amendments
- NGO Darpan — the Darpan identification number the application requires
Documents required
- 01Registration certificate and the trust deed, memorandum or incorporation documents
- 02Registration under Section 12AB and approval under Section 80G, where held
- 03Audited financial statements for the last three financial years
- 04Activity report for the last three years, showing the work actually carried on
- 05Details of office bearers and key functionaries, with identity documents and Aadhaar as the rules require
- 06Resolution of the governing body authorising the application and the designated account
- 07Details of the designated FCRA bank account at the specified branch, and the utilisation account
- 08Permanent account number of the organisation
- 09Darpan identification number from the NGO Darpan portal
- 10For prior permission: the donor's commitment letter with the amount and the purpose, and the project details
Due dates and penalties
| Item | Due date | If missed |
|---|---|---|
| Annual return in Form FC-4 | By 31 December each year, for the financial year ended 31 March | Penalty under the Act, and the registration can be suspended or cancelled |
| Renewal application in Form FC-3C | At least six months before the five-year validity expires | The registration lapses and foreign contributions cannot be received or utilised |
| Reporting a change in name, address, objects, office bearers or bank account | Within the period the FCRA Rules prescribe after the change | Contravention of the Act and the Rules |
| Quarterly disclosure of foreign contributions received | On the organisation's website, at the frequency the Rules prescribe | Non-compliance with the Rules |
| Separate books and audited statements for foreign contributions | Maintained for each financial year and audited | Contravention; the return cannot be filed without them |
The FCRA framework has been amended more than once, significantly by the amendments of 2020, and the validity of registrations has on occasions been extended by order while renewal applications were pending. Further amendments to the Act have been under consideration. Confirm the current position on the FCRA portal before relying on any requirement stated here.
Mistakes to avoid
- Receiving a foreign contribution into the organisation's ordinary bank account instead of the designated account.
- Applying for registration without the three-year track record and the expenditure on objects the conditions require.
- Treating registration as perpetual, when it runs for five years and renewal must be applied for six months before expiry.
- Transferring foreign contributions to another organisation, which the amended Act restricts.
- Administrative expenses exceeding the proportion of foreign contributions the Act allows.
- Mixing foreign contributions with domestic funds in the same account or the same books.
- Not filing Form FC-4 for a year in which no foreign contribution was received, when a return is still required.
- Changing office bearers or the registered address without reporting it in the prescribed form.
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