Foreign Contribution Regulation Act, 2010

This act replaced the Foreign Contribution (Regulation) Act, 1976 (FCRA). The act seeks to regulate the acceptance and utilization of all foreign funds through donations, gifts or grants.

♤ The 1976 Act lists a number of organisations and individuals that are prohibited from accepting foreign contribution. The Bill adds organisations of a “political nature” and electronic media organisations to the list.

♤ The act requires all persons to register under FCRA to accept foreign contribution. The central government may deny, suspend or cancel certification under certain conditions.

♤ Organisations must renew FCRA certification every five years.

♤ It prohibits acceptance and use of foreign contribution or foreign hospitality by a certain specified category of persons such as a candidate for election, judge, journalist, columnist, newspaper publication, cartoonist, et al.

♤ The act prevents use of foreign contribution or foreign hospitality for any activity detrimental to the national interest.

♤ The foreign contribution shall be utilized for the purpose for which it has been received and such contribution can be used for administrative expenses up to 50% of such contribution received in a financial year.

♤ Every bank shall report to such authority, as may be prescribed, the amount of foreign remittance received, sources and manner and other particulars.

♤ Every NGO registered or having prior approval under the Act must file an annual report with the Authority in the prescribed form. This report must be accompanied by an income and expenditure statement, receipt and payment account, and balance sheet for the relevant financial year. For financial years where no foreign contribution is received, a 'NIL' report must be furnished with the Authority.

♤ New provisions have been made for suspension as well as cancellation of registration granted for violation of the provisions of the Act.

The act has a very wide scope and is applicable to a natural person, body corporate, all other types of Indian entities (whether incorporated or not) as well as NRIs and overseas branches/ subsidiaries of Indian companies and other entities formed or registered in India. It is implemented by the Ministry of Home Affairs, Government of India.