THE FOREIGN CONTRIBUTION(REGULATION)

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1 THE FOREIGN CONTRIBUTION(REGULATION) ACT,2010 Citizens NGOs/Trusts Banks Chartered Accountants & other professionals Ministry of Home Affairs & NIC FCRA ACT 2010 Public servants, Juges, Members of legislature, political parties Employees of MHA Security agencies Organizations of political nature

2 THEFOREIGN CONTRIBUTION(REGULATION) ACT,2010 FCRA 2010 is based on the foreign contribution(regulation) bill which was passed by both the houses of parliament received the assent of President on 26 th September,2010. It came on the statue book as THE FOREIGN CONTRIBUTION( REGULATION) ACT 2010 on 1 st May 2011 vide S.O 909(E) Dtd 29 th April 2011.

3 Applicability of the act : Extends to whole of India, Every citizen of India outside India Associate branches or subsidiaries outside India Association Authorized person in foreign exchange Bank Foreign company Legislature Person : individual, HUF(definition of Person includes Associations and Sec 25 companies Political party Trade union

4 REGISTRATION: Registration of certain persons with the central government Conditions to fulfill for registration / prior permission the certificate Grant of certificate of registration Suspension of certificate Cancellation of certificate Renewal of certificate

5 Registration of certain persons with the central government : No person having a definite cultural, economic, educational, religious i or social program shall accept foreign contribution unless such person obtains a certificate of registration from the CG. Every person referred in sub section(1) if it is not registered with ithcg shall accept any foreign contribution only after obtaining prior permission from CG & shall be valid only for the specific purpose for which it is obtained.

6 Conditions to fulfill for registration / prior permission the certificate: Person should not be benami Not likely to use FC for personal gains Not found guilty for diversion / misutilisation of funds Not prosecuted or convicted for any offence Not likely to advocate sedition / violent methods Not violated FCRA Reasonable project for prior permission.

7 Grant of certificate of registration Application to be made online for registration along with a fee of Rs / / for prior permission along with a fee of Rs.1000/ Hardcopy of application has to be reach Dept. within 30 days of online submission. If not done application so filed cease. Issue of registration certificate / prior permission i to be ordinarily il done within 90 days of submission otherwise reasons to be provided by Dept.

8 Suspension of certificate Where the Central government, is satisfied that pending consideration of the question of cancelling the certificate on any of the grounds mentioned in sub section(1) of section 14 will lead the suspend of certificate for such period not exceeding 180 days as may be specified in the order Impact of suspension of certificate : a. Not receive any foreign contribution during the suspension period of certificate b.utilize, in the prescribed manner, the foreign contribution in his custody with approval of central government

9 Cancellation of certificate a. The holder of certificate has violated any of the terms and conditions of the certificate or renewal thereof ; or b. In the opinion of the central government, it is necessary in the public interest to cancel the certificate; or c. If the holder of certificate has not been engaged in any reasonable activity in its chosen field for the benefit of the society for two consecutive year or has become defunct. d. Any false or incorrect information in the application form will lead to cancellation of certificate Any yperson whose certificate has been cancelled under this section shall not be eligible for registration or grant or permission for a minimum period of 3 years from the date of cancellation of certificate.

10 Renewal of certificate Every person, granted a certificate u/s 12 shall his certificate with in maximum period of 6 months before expiry. Application for renewal should be made to central government in prescribed form along with fee,as applicable. Central government shall renew within the period of 90 days from the date of receipt of application.

11 ACCOUNTING TREATMENT Maintenance of accounts Intimation Audit of accounts Disposal of assets

12 Maintenance of accounts Every person, granted permission u/s 12 shall maintain a single account for receiving foreign contribution through such one branch of a bank as specified in application form He may open one or more account for utilization of foreign contribution with the prior approval of central government.

13 Intimation Every person, granted a certificate shall intimate (Intimation to be done online on annual basis and subsequently submit audited accounts & certificate. There is no specific need to intimate each transaction.) to the central government & prescribed authority with the amount of foreign contribution received Every person receiving foreign contribution shall submit a copy of statement stating the details of foreign contribution.

14 Audit of accounts Central government has a power to audit any premises at any reasonable time for the purpose p of auditing the prescribed books of accounts. A Gazetted officer or a officer holding Group A post can undertake the audit under central government.

15 Disposal of assets Any person, permitted for acceptance of foreign contribution under this act, ceases to exist or has become defunct, all the assets of above said person will be disposed off in accordance of relevant provisions of act. Central government in the absence of applicable act will act with regard to the nature of assets created out of foreign contribution.

16 Central government may by ygeneral order or special order, authorize such Gazetted officer to inspect any account or report maintained by any person covered in act. He may seize such account or record where he has some reasonable cause to believe with the violation of any of provision of act Such officer should return the seized accounts with in the maximum period of 6 months if there is no proceedings is bought for the such contravention.

17 APPEALS & REVISION Any person making false information, declaration or delivering false accounts, providing false intimation u/s 9 or 18 or seeks prior permission or regulations by way of means of fraud will liable for imprisonment for a period of six months or with fine or both.

18 MISCELLANEOUS Power to call for information or documents Investigation powers are same as that of an officer in charge at police station CBI or any other agency investigating cases under the act to furnish quarterly return on progress on all cases. No suit / other legal proceeding against any of the govt. agencies or their officers for acting in good faith in the pursuance of act.

19 MISCELLANEOUS Certain administrative powers to make rules. Procedure for laying of rules in parliament. Power to exempt organizations from of all or any provision of this act. Not to apply to transactions between Government of India & foreign governments.

20 MISCELLANEOUS Provisions of this act are in addition to, and not in the derogation of the provisions of any other law. Power of government if India to remove any provision which are found inconsistent, within the period of 2 years of the commencement of the act. Provision relating to repealing of FCRA 1976.

21 NON APPLICABILTY OF ACT (applicable to only persons referred to under Sec. 3 : Any amount received by way of salary, wages or any other form of remuneration due to him or to any other group of persons. Amount received by way of payment, in the course of international trade or commerce or in the ordinary course of business transacted by him outside India. As a agent of a foreign source in relation to central government transaction By way of any scholarship, stipend or any other payment of like nature. From relative

22 Particulars FCRA 2010 FCRA 1976 Foreign contribution Scope expanded to include the securities as defined d u/s 2of the Only the foreign securities defined under FEMA are included d Clause ( c) of sec.2 Securities Contracts (Regulation) Act, 1956 Clause(h) of sec.2 Prohibition to accept FC Various sub clause added [sub clause (e), (f), (g), (h) of s.s(1) of sec.3 of FCRA, 2010 ] FC received from relative Need to file a return under FC 1 if more than Rs 1 lakh per annum Permitted only with prior permission of CG in case exceeding Rs. 8000/ p.a

23 Particulars FCRA 2010 FCRA 1976 FC by way of scholarship, stipend or like payment Sec. 3 N.A. Intimation to CG required in case exceeding Rs. 36,000/ p.a Validity of registration certificate Five years No end date Validity of permission of CG valid for the specific purpose or specific amount of FC proposed to be received valid for 5 years from the effective date.

24 Particulars FCRA 2010 FCRA 1976 Administrative expenses Section 8(2) inserted to No corresponding provide that restriction person/association having registration under FCRA/ prior permission shall not defray more than 50% of the FC received in a financial year to administrative i ti expenses unless prior permission is obtained

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