FCRA Registration

The full form of FCRA is Foreign Contribution Regulation Act. The Foreign Contribution Regulation Act of 1976 is a government law that grants the receipt of foreign contributions or assistance to Indian areas from outside India.

Many funds are released by the Indian government and foreign funding agencies for the benefit of the underprivileged. These funds are distributed on a regular basis to non-profit organizations that have received an FCRA certificate.

When you want to attract foreign donations, FCRA Registration will help you. If an NGO gets itself registered under section 80G & 12A then the person or the organization making a donation to the NGO will get a deduction of 50% of the donation amount from taxable income.

Registration for 80G Certificate

• NGO can avail of income tax exemption by getting itself registered and fulfilling certain other formalities, but such registration does not provide any benefit to the person making donations. To provide income Tax benefits to the “donors”, all NGOs must apply for 80G & 12A certification.
• If an NGO gets itself registered under section 80G & 12A then the person or the organization making a donation to the NGO will get a deduction of 50% of the donation amount from taxable income,
• An NGO is applicable for government funding if it is registered under 12A.
• A newly registered NGO can also apply for 12AG registration.
• An NGO does not have to pay tax for the entire lifetime if it gets registered under section 80G & 12A.
• FCRA registration is required to attract donations outside India; The NGO must be registered under the provisions of the foreign contribution regulation act, 1976.
• For FCRA registration an NGO must have completed three years of operations. FCRA Registration is granted by the Ministry of Home Affairs, Govt. of India.

FCRA Registration is required for your NGO to attract foreign donors.

The Foreign Contribution and Foreign Hospitality Regulations Act, 2010, was enacted by Parliament to consolidate the law to regulate the acceptance and use of foreign contributions or foreign hospitality by certain individuals, associations, or companies, and to prohibit the acceptance and use of foreign contribution or foreign hospitality for any activities damaging to the national interest, and for matters related to or incidental to those activities.

• NGO income or assets should be exclusively for the purpose of charity.
• Proper books of accounts of the NGO should be maintained, including all receipts and expenditures.
• NGO should not be formed with the benefit of a particular religion, community, or caste.
• NGO should have the core objective of charitable purposes, and the whole income should be from donations. If in case, the NGO has a business income then the trustee of the NGO should maintain separate books of accounts to ensure that the NGO should not divert donations.
• For FCRA registration, an NGO must have completed three years of operations.

The Foreign Contribution (Regulation) Act, commonly known as FCRA, is the legislation that oversees and provides guidance on how foreign contributions can be utilized by individuals, associations, and organizations in India. For instance, FCRA is essential for those seeking to receive foreign funds for a wide range of purposes, including education and culture. However, before delving into the process, it is important to understand the advantages of obtaining FCRA registration.

• Tax Benefits: NGO can avail of income tax exemption by getting an 80G & 12A certificate.
• A lifetime tax exemption: NGOs do not have to pay tax for the entire lifetime if it gets registered under section 12A.
• Government Funding: An NGO is applicable for government funding if it is registered under 80G & 12A
• Attract Foreign Donations: It's mandatory to get FCRA Registration if one wants to have foreign donors in an NGO.
• Borrowing Capital: It’s easy for an NGO to receive foreign donations if registered under FCRA.

If FCRA registration benefits & Liabilities fulfill your business requirement, then FCRA registration might best suit your NGO needs.

• A copy of PAN Card (NGO).
• Certified copy of Trust Deed / MOU.
• Past 3 years Audited Balance Sheet, Income & Expenditure Account.
• A Copy of the certificate issued by the Income Tax Authority under 80G & 12A of the Income Tax Act.
• Details about the current and past management of the trust.
• Copy of resolution passed by the Governing Body of the NGO.
• Annual report of the NGO and details of work done in the past 3 years.
• Copy of Undertaking from the Chief Functionary of the NGO.

Once the FCRA registration is granted, the validity is for a five ¬year period. Nevertheless, it is to be noted that an application for the renewal of the FCRA registration has to be made 6 months prior to the date of expiry.

The following are the steps to apply for registration under the FCRA:-

Step 1. involves visiting the FCRA's online portal.

Step 2. Click on either Form FC – 3A (Application for FCRA Registration) or Form FC – 3B (Application for FCRA Prior Permission), as applicable.

Step 3. You will be given the option to apply online on the webpage.

Step 4. After clicking "Apply Online," the next step is to create a username and password by clicking "Sign Up."

Step 5. Fill in all required information and save.

Step 6. The applicant may log in to the account once a username and password have been created and a message regarding the same has been displayed on the screen.

Step 7. Once logged in, select FCRA Registration from the "I am applying for" dropdown list. Then select "Apply Online," followed by "Proceed Registration."

Step 8. The FC-3 menu must then be clicked in the title bar to begin the new registration procedure.

Step 9. The submit button is selected after these details and attachments have been filled in.

Step 10. The Executive Committee option from the menu bar must be selected next. The Executive Committee form will be filled out with the necessary information.

Step 11. The option "Add details of Key Functionary" allows the applicant to edit, delete, or add information to the Executive Committee.

Step 12. The "Save" button must be clicked once all of the Executive Committee details have been entered.

Step 13. In addition, bank information will be required, including the bank's name, account number, IFSC code, and address.

Step 14. After you've entered your bank information, you'll need to upload all of the required documents in PDF format.

Step 15. Following that, the location and date must be entered before selecting the final submission button.

Step 16. The final step is to complete the online payment by selecting that option. No changes to the form can be made after the payment has been made and the form has been submitted.

Sample Form of FC- 3A Application to be filled

FCRA Bank Account

NDMB was involved in the opening of the FCRA account in the past.

However, as of June 2021, you do not need to visit the NDMB to open a designated FCRA account. If you are a current SBI customer, you may submit the enclosed account opening form along with the required KYC document to your home branch, which will be forwarded to the NDMB by your branch.

Process flow after opening an FCRA bank account for a non-profit organization to receive foreign contributions via SWIFT mode

• After confirming that the MHA has already granted a registration certificate or prior permission under section 12 of the FCRA, 2010, the NDMB will allow foreign contributions to be received only in the "FCRA Bank Account" opened in the NDMB.

The following information should always be included in any foreign inward remittance:

1. Beneficiary number in SBI's NDMB under "FCRA Bank Account"
2. NDMB's SWIFT Code (SBININBB104)
3. The Beneficiary's Name
4. The Donor's/Name Remitter's
5. Donor/account Remitter's number
6. The Address of the Donor/Remitter
7. Country of Residence of the Donor/Remitter

• If an NGO does not have an FCRA account, the NDMB must open one and then wait for the MHA to make a decision on their FCRA application for prior permission or registration certificate. NDMB shall allow the inflow of foreign contributions into the relevant account from the date that the MHA approval for such registration or prior permission is communicated to NDMB via e-mail.
• Customers will be notified about the receipt of foreign contributions by SBI and NDMB via e-mail and SMS.
• Customers will be required to submit an undertaking to the SBI Branch where they initially submitted the FCRA account opening form, detailing the purpose of the fund's receipt in accordance with FEMA declaration and RBI guidelines.
• The FEMA guidelines and RBI instructions allow for a standard Forex conversion rate to be used on foreign currency inflows. It will be properly communicated to the FCRA account holder via email.
• The FCRA Account holder shall have complete freedom to transfer the foreign contribution (FC) received in his NDMB FCRA Bank Account to another FCRA Account of his choice, if any, opened in any branch of any Scheduled Commercial Bank as he sees fit for storage or use. It can also use the NDMB's Internet Banking service (with full transaction rights).
• On any transfer of foreign contribution from the FCRA Bank Account to the NGO's FCRA Utilization Account, if any, the NDMB will not charge any fees or charges. The "FCRA Account" holder will be immediately notified of each such transfer via e-mail and SMS.

• Click on the form FC-3C, which is an application for FCRA registration renewal.
• Login account and password for login-id
• To register, you must upload the required documents.
• Fees of Rs. 5,000 must be paid and the application must be printed.

Documents for Renewal of the FCRA Registration

For renewal of FCRA registration, you require the following documents- 

• The Chief Functionary's signature, the association's seal, 
• The Registration Certificate of the Memorandum of Association/ Trust Deed 
• FCRA Registration Certificate of the association issued by MHA must be uploaded.

With an extensive background and profound expertise in FCRA registration, the team at Corpseed possesses years of experience in this field. Our adeptness in the intricacies of the process enables us to provide comprehensive consultation services to our clients, encompassing meticulous desk-based research, thorough documentation, and efficient coordination. Our ultimate objective is to facilitate businesses in successfully navigating the registration process. Consequently, Corpseed stands as the ultimate solution for all your business requirements.