FCRA Compliance for NGOs in India

  • February 18, 2023
  • Registrationwala
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FCRA Registration for Trusts & NGOs in India.

Taxes in India deter many foreign nationals from applying for lawful donations. For such purposes, the Government issues them some incentives, assuring them the donations made will be provided entirely to the intended beneficiary. Most donations are directed towards taxes. To counter such effects of the Taxation system, online FCRA registration becomes necessary.

The FCRA in India regulates foreign money as well as hospitality to various NGOs. Such registration is necessary to get money from foreign institutes. The FCRA primarily regulates foreign donations and ensures that it does not affect the domestic political scene.

 

Eligibility for FCRA Registration of Trusts & NGOs in India

Here we have listed some of the eligibility requirements for online FCRA Registration in India:

  • Every applicant Trust/NGO must dedicate their income and assets exclusively towards charity. They must also maintain Proper Books for verification.
  • The NGO must not exclusively favour any particular community, faith, or caste.
  • Since an NGO's core objective is charity, the entire income of the NGO must be from donations only.
  • The applicant NGO must be operational for atleast 3 years before opting for the online FCRA registration.

 

What disqualifies an NGO/Trust from an online FCRA Registration Certificate?

As per the FCRA regulations in India, the Apex Bank RBI can reject an FCRA registration application of an NGO in the following cases:

  • The applicant NGO's existence is fictitious.
  • The applicant has faced conviction for illegally indulging in religious conversion activities through either of the following:
    • Inducement 
    • Forcefulness
  • The applicant NGO is prime accused of riling communal tension in the country.
  • The applicant has misused the approved foreign fund.
  • The applicant promotes sedition and incites violence to serve its malicious purposes.
  • The applicant uses the foreign contribution for personal gains or diverts it for malintent purposes
  • The applicant NGO has contravened any of the provisions of the FCRA Act
  • The RBI prohibits the applicant from accepting any foreign contributions.
  • The directors, as well as the office bearers of the applicant NGO, is or have been convicted under the law, and a prosecution is pending against them.

 

FCRA Regulations in India warns of Malicious Foreign Contributions 

The overlooking of FCRA regulations in India, in case of the Foreign Establishment's malintent, can have detrimental effects on the Nation. Various organizations transact the funds which can, directly or indirectly, threaten the major interests of our Nation, such as:

  • Sovereignty of India
  • The integrity of the Indian political structure
  • Security & Scientific Temper of the Nation
  • Economic Interests of the Country
  • General Public Interest
  • Electoral Structure of the State as well as Central Legislature
  • Strategic relationship with a Foreign Nation
  • Harmony of people belonging to different:
    • Faith
    • Ethnicity
    • Social Structure
    • Linguistic Diaspora
    • Region
    • Caste

 

How to open an online FCRA account in India?

To open an FCRA account online, follow the detailed SOP below:

1. Entity seeking to receive Foreign Contributions must approach the nearest SBI Branch to submit their Account Opening Form (AOF) for the following purposes:

  • KYC
  • Photo
  • Signature verification

Thereafter, they must scan and forward it through the mail and send a hard copy for opening an FCRA Account.

2. The applicant then must collect the Account Opening Form from the website of SBI and submit the filled form with mandatory documents for scrutiny. Mandatory documents must include KYCs of the following, as per the guidelines issued by the RBI:

  • Account Signatories 
  • Controlling Person 
  • Beneficial Owner

Consequently, the applicant will receive an acknowledgement from the AOF accepting SBI Branch.

3. The AOF accepting branch will scrutinize the filed AOF and KYC documents and further email them to the SBI & NDMB within three days of receipt of completed documents. The SBI and NDMB will further confirm to the applicant through an email regarding AOF receipt within 1 working day.

4. The NDMB will further inform the applicant of details of his or her FCRA Account opened within 3 days of receipt of verified scanned copies of AOF and KYC documents from the email of the receiving SBI branch. The Bank will send the intimation through its registered email ID and SMS. The applicant must maintain its existing FCRA Accounts for Keeping and Utilization purposes.

 

To know further about the FCRA registration process, connect with the Finance Experts at Registrationwala.

 

 

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