Important Amendment in FCRA 2010

Important Amendment in FCRA 2010 – A precise article

Happy New Year

The FC wing of Ministry of Home Affairs of India has come up with a notification amending the Foreign Contribution (Regulation) Rules 2011 by which shall be known as Foreign Contribution (Regulation) Rules 2015. The purpose which could be understood or felt is to make the various process of FC user friendly and easily accessible. The processes to apply for the registration, renewal, prior permission etc. are made online now. The direct impact is to reduce the manual intervention and speed up the application and other process. The important changes or say amendments are as follows:

a. Reducing the number of forms and providing online platform: All the forms have been replaced with new forms and new numbers. Like FC-5 is now FC-3, FC-6 is now FC-4. Earlier the total number of forms was 10 from FC-1 to FC-10. Now it is reduced to 7 that is FC-1 to FC-7. All the forms shall be filed online along with requisite documents.

b. Online Payments of fees: From now onwards all the payments shall be made online only. Now there is no need to make demand draft and send them to MHA’s FC wing.

c. No need to send hard copies: from now onward there is any need to send the hard copies of the documents along with the signed copy of form. Unlike earlier the copy of application is required to be sent to the ministry within 30days of submission of application. Now simply fill online form and upload the scanned copy of documents with the website of MHA.

d. Declaration from person receiving foreign contributions: The person receiving foreign contributions shall file declaration under Form FC - 4 containing following undertakings:

i. The utilization of foreign contribution is not in the contravention of the provision of FCRA, and,

ii. The receipt of foreign contribution is not likely to prejudicially affect the public interest, security, strategic, scientific or economic interest of the State, harmony between religious, racial, social, linguistic or regional group, castes or communities, freedom or fairness of election to any legislature.

e. Mandatory disclosure of foreign contributions: Earlier, disclosure of foreign contribution was required only if aggregate receipts exceeded one Crore rupees in a financial year. Now such monetary limit has been done away with. In this way, any person who has been granted certification of registration or prior permission to receive foreign contributions shall have to place the following financial statements for every financial year on its official website or Govt.'s website within 9 months of the of closure of the financial year:

i. The audited statements of accounts on receipts and utilization of the foreign contribution,
ii. income and expenditure statement,
iii. receipt and payment, and
iv. balance sheet

f. Submission of Quarterly Statement: Now quarterly submission of details are also required to be submitted by a person receiving foreign contribution on its official website or on website specified by Govt. within 15 days following the last day of quarter in which foreign contribution has been received.

g. Informing to Government on change in society and its constituents: Seeking of prior permission for change of name, aims and objects, address of the association, change of bank or account, change in Governing Body members, etc. have now been taken away. Now only intimation through FCRA online service will suffice the requirement.

h. Certain persons exempted from obtaining certificate from CAs: The persons who do not receive or utilize foreign contribution in a financial year would not be required to submit certificate from Chartered Accountant and audited statement of accounts with annual return.

Provisions are relaxed to the process part only but it is now more stringent so far the disclosures and supply of information are concerned. But in any case it is welcome moves of the ministry of home affairs rather say Indian Government rather say digital India move.

Hope this will help you understand the basic changes brought by the notification...

Regards!
CA Yogesh Kr Agarwal