The Government of India (GoI) has made seven key amendments to the existing Foreign Contribution (Regulation) Act (FCRA) Rules 2011, which will now be known as the Foreign Contribution (Regulation) Amendment Rules, 2022, w.e.f. July 01, 2022. Amended FCRA will allow Indians to receive up to Rs 10 lakh in a year from relatives staying abroad without informing the authorities. The earlier limit was Rs 1 lakh.
- The rules were amended by GoI in exercise of the powers conferred by section 48 of the Foreign Contribution (Regulation) Act, 2010 (42 of 2010).
The FCRA prohibits the acceptance and use of foreign contributions or foreign hospitality for activities that are detrimental to the national interest.
- The principal rules were published on April 29, 2011, and subsequently amended on April 12, 2012; December 14, 2015; March 7, 2019; September 16, 2019; November 10, 2020, and January 11, 2021.
The 7 Amendments in the FCRA
i. There are two amendments in rule 6 by substituting the words “one lakh rupees” with the words “ten lakh rupees”; and the words “thirty days” with the words “three months”.
ii.In rule 9, in sub-rule (1), in clause (e), for the words “fifteen days”, the words “forty-five days” shall be substituted; and in sub-rule (2), in clause (e), for the words “fifteen days”, the words “forty-five days” shall be substituted.
iii. Clause (b) of rule 13 has been omitted from the fresh rules; and in rule 17A, for the words “fifteen days”, the words “forty-five days” shall be substituted.
iv.In rule 20, for the words “on a plain paper”, the words “in such form and manner, including in electronic form as may be specified by the Central Government” shall be substituted.
What is FCRA?
The Foreign Contribution (Regulation) Act (FCRA) was first enacted in 1976. It was amended in 2010 when a series of new measures to regulate foreign donations were adopted.
- The Foreign Contribution (Regulation) Act (FCRA), 2010, consolidates the laws governing the acceptance and use of foreign contributions and foreign hospitality by specific individuals, associations, or companies.
- It also forbids the acceptance and use of such resources for any activities that are harmful to the interests of India.
Ambit of FCRA
i. The FCRA covers all of India and is also applicable to Indian nationals living abroad.
ii.The rules of the Act should also be followed by associate branches, outside India, or subsidiaries of companies or bodies corporate registered or incorporated in India.
iii. All associations, groups, and Non-Governmental Organizations (NGOs) that wish to accept foreign donations must comply with the FCRA.
- All such NGOs are required to register with the FCRA. The registration is valid for five years and can be renewed if all of the standards are met.
- Registered associations can receive foreign contributions for social, educational, religious, economic and cultural purposes. Filing of annual returns, on the lines of Income Tax, is compulsory.
iv.The Ministry of Home Affairs (MHA) announced new regulations in 2015 which required NGOs to certify that accepting foreign funding would not adversely affect India’s sovereignty and integrity, its friendly relations with other countries, or disrupt communal harmony.
- Additionally, it stated that in order to provide security agencies with access in real time, all such NGOs would need to operate accounts in either nationalised or private banks that have core banking facilities.
v.It is prohibited for legislators, political party members, government employees, judges, and media people to accept any foreign donations.
vi.The MHA can suspend an association’s FCRA registration for up to 180 days after inspecting its accounts and receiving any negative feedback about its operations.
- The association cannot accept any new donations until a decision is made, and it cannot spend more than 25% of the amount in the designated bank account without the MHA’s approval.
vii. The MHA can cancel an organization’s registration, after which it will be ineligible for registration or grant of “prior permission” for 3 years from the date of cancellation.
