Overview of FCRA Registration

FCRA is a short form of the Foreign Contribution Regulation Act that regulates and controls foreign contributions in India. The main goals of FCRA Registration Online in India are to ensure proper use of the money for the designated purpose and decriminalise the receipt of any foreign contributions by domestic organisations.

The Ministry of Home Affairs in India grants Non-Profit Organizations an FCRA registration permit, which allows them to keep track of donations from foreign sources. To accept donations from outside parties, Section 8 corporations, charitable trusts, and registered charities must register under the Foreign Contribution Regulation Act (FCRA). When NGOs and charitable trusts are registered with the FCRA, it becomes simpler for them to transfer funds from foreign sources into their FCRA account. Indian non-profits that serve specific populations extensively and are judged to need support can apply for donations from foreign funding agencies.

The Objective of FCRA 2010

The Foreign Contribution Regulation Act, 2010 was passed in order to: ·Control the acceptance and use of foreign hospitality or contributions by specific associations or businesses; 

Prohibit the acceptance and use of foreign hospitality or contributions for any kind of activity. Unfavourable to national interest and for matters related to therewith or incidental thereto.

Eligibility Criteria of FCRA Registration:

• Income or assets owned by NGOs should only be used for charitable purposes.
• The NGO should keep accurate books of accounts that include all income and outlays.
• An organisation should not be founded to serve a specific religion, community, or caste. 
• Its primary goal should be to further charitable causes, and donations should provide for all of its funding. 
• In the event that the non-profit organisation generates revenue from its operations, the trustees of the organisation ought to uphold distinct accounting records to guarantee that donations are not misused. 
• An NGO needs to have operated for three years in order to be registered under the FCRA.

Benefits of FCRA Registration

The FCRA registration offers several benefits to non-profit organisations in India that intend to receive foreign contributions for their various programs. Some of them are discussed below:

• Legal Recognition and Credibility: FCRA registration provides legal status and credibility on both domestic and international platforms. It guarantees that the organisation can lawfully accept donations or contributions from overseas sources and that it conforms with national legislation.
• Access to Foreign Funding: An FCRA-registered organisation can access foreign individuals, agencies, and foundations. This provides opportunities for increased funding, which can significantly improve the capacity of an organisation to carry out and expand its operations.
• Increased Trust from Donors: Foreign and domestic donors are likely to have greater faith in an organisation that is FCRA-registered. This is because contributors are reassured that their money will be used responsibly by the registration's strict adherence to FCRA rules and regulations.
• Tax Exemptions: Organisations that have registered with the FCRA are entitled to certain tax advantages, such as Income Tax Act exemptions. These benefits can help allocate more funds to the organisation's goals.
• Long-Term Sustainability: Access to foreign funding can improve the long-term viability of non-profit organisations, especially when domestic funding sources are limited or unstable.

What is a Foreign Source?

The following are examples of foreign sources as defined by Section 2(1)(j) of the Financial Crimes Act of 2010: 

• Any foreign government and any agency thereof; 
• Any international agency, excluding the United Nations or any of its specialised agencies, the World Bank, the International Monetary Fund, or any other agency that the Central Government may designate in this regard by notification;
• A corporation that is not a foreign company that is incorporated in a foreign country or territory; 
• A multi-national corporation mentioned in clause (g) subclause (iv); 
• A company as defined by the Companies Act, 1956, and more than half of the nominal value of its share capital is held, individually or collectively, by one or more of the following: 
• The foreign country or territory's government; 
• The foreign country or territory's citizens; 
• Corporations incorporated abroad or in the territory; 
• Trusts, societies, or other associations of people (whether incorporated or not), established or registered in a foreign nation or territory; Foreign company;
• A trade union operating in any foreign nation or territory, regardless of whether it is registered there; 
• A foreign foundation or trust, regardless of name, or a trust or foundation primarily funded by a foreign nation or territory;
• A group of people organised or registered outside of India as a society, club, or other association;
• A national of another nation. The following is a list of international agencies and multilateral organisations, including the World Bank and the United Nations, that are not considered "foreign sources."