Why Do We need FCRA Registration?

Posted by Enterslice on January 25th, 2019

Introduction:

With the overall growth in different sectors, India started to develop relations with a foreign institution, trade unions, companies in foreign and firms, this led to a suspension of establishing such relation with a foreign entity which shall influence the national life of India. The main prone areas to get affected by are public related institutions, NGO, judges, Electoral Politics, Public servants, Reporters, publishers, such other people working in influencing nationwide life.

Objective:

The prime objective of the FCRA act is to regulate the acceptance and usage of foreign contribution and foreign hospitality (e.g. free airplane tickets and hotel lodging during Videsh-yatra) by such associations and persons working in such area. Violation of such rules and regulation of FCRA may lead to Imprisonment of 5 years.

For Example in the case of NGO

You can donate to NGOs that registered under FCRA. In case you are a non-resident Indian, not holding Indian Passport and your donation will be treated as of foreign source.

In case of giving a donation to an NGO that is not registered under FCRA, Give (Optional but should be obeyed) a letter of intention to donate a specified amount for a specific purpose/program of the NGO to the Central Government of India and the NGO.

No prior permission is required to be taken by NGO under FCRA act, by attaching your letter of intention. Once prior permission is received by the NGO can receive the contribution.

Who can receive foreign contribution?

Organizations working for definite cultural, social, economic, educational or religious programs, can receive foreign contribution.

Who cannot obtain Contribution?

  1. Election candidate.
  2. MP and MLAs.
  3. Newspaper: Correspondent, columnist, cartoonist, editor, owner, printer or publishers of a registered Newspaper.
  4. Public Servants: Judge, government servant or employee of any Corporation or any other body controlled on owned by the Government

The requirement under FCRA Act for an entity willing to receive or give such contribution or hospitality

  1. According to section 6(1) of the FCRA act 1974, an entity should be registered or shall take prior permission before receiving such contribution/hospitality from the other organization.
  1. An application is required to be made for FCRA registration or Prior permission from FCRA,

Note that prior permission is required to be taken in cases where FCRA registration has been denied or application is rejected for registration.

  1. Second, they have to maintain a separate account book listing the donation received from foreigners and get it audited by a Chartered Accountant and submit it to the Home Ministry every year.

For obtaining the FCRA registration under FCRA act, the applicant or association should be preferably registered under the following Act:

1. The Societies Registration Act 1860;

2. India trust Act 1822;

3. Charitable and Religious trust act 1920;

4. The Companies Act 2013/1956

FCRA Registration Procedure

Here the FCRA Registration Process-

  1. An application is required to be made to Ministry of Home affairs and health organization in the form available at https://fcraonline.nic.in/home/fcra_onlineform.aspx.
  2. Fill in the form and submit it along with attachments as required.
  3. The deposing of the application takes around 90 days maximum.
  4. The Ministry of Home affairs and health organization shall ask for a report from IB (Investigation Bureau), Te IB shall submit the report to MHAH and on being finding the facts so submitted correctly shall issue the certificate of registration.
  5. The Permanent Registration certificate shall be obtained by the applicant.

Compliance requirement o be maintained by the organization or entity applying for FCRA registration after obtaining the registration:

  1. The permanent registration number obtained shall be mentioned in all the communication Form the applicant side
  2. Separate Books of account should be maintained for foreign contributions received.
  3. The cash book and ledger to be maintained in the double entry system of bookkeeping.
  4. Details of accounts of foreign donation shall be maintained on a financial year basis.

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Enterslice

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Enterslice
Joined: December 20th, 2017
Articles Posted: 48

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