The fcra,2010

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A BRIEF STUDY OF FOREIGN CONTRIBUTION (REGULATION)ACT,2010

- by N.PRASSANVADANA, ALTACIT GLOBAL



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SHORT CONTENT OF THE ACT

• An Act to consolidate the law to regulate the acceptance of foreign contribution/hospitality by certain individuals, associations or companies and thus to protect national interest. This Act is to be read together with Foreign Contribution Regulation Rules, 2011.



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APPLICABILITY: Sec.1

• Extends to whole of India;• Citizens of India outside India;• Associate branches or subsidiaries outside India of

Companies registered/incorporated in India.• Applicable to Individuals, Associations, Companies,

Non-Profit, Non-Governmental Organizations who receive Foreign Contribution/Hospitality .



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WHAT IS FOREIGN CONTRIBTION/HOSPITALITY: Sec.2

• Foreign contribution means donation/delivery/transfer made by any foreign source,– Of any article not being an article of gift to a person for his

personal use, the value of which is within the value specified by Central Govt. from time to time.

– Of any currency Foreign or Indian, or any security/foreign security as defined by FEMA or any governing law in force.

– Foreign hospitality means offer made in cash or kind for providing a person with cost of travel, boarding, lodging, including but not limited to medical treatment in a Foreign country.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



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WEBSITE

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WHAT CONSTITUTES FOREIGN SOURCE: Sec.2

• Govt. of any Foreign country/territory and it’s Agents.• International Agency not being UNO or it’s specialized

agencies.• Foreign Company, MNC, a corporation not being a foreign

company incorporated in a foreign country or territory;• Company within the meaning of Companies Act 1956(sec.1 of

1956) if more than half of its share capital is held by a Foreign country, company, corporation, trusts, society , association or foreign citizen.

• Any corporation, trusts, association, society, trade union, club, organization or individual incorporated in a Foreign country.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



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WHO CANNOT RECEIVE FOREIGN CONTRIBUTION: Sec.3

• Election candidates, office bearers of political parties, any person/organizations on behalf of political parties.

• Members of Press including Owners, Publishers ,Printers of regd. Newspapers, and nd journalists.

• Judges, Government servants, Legislative Members.• Organisation of a political nature as specified under

Sec.5(1).• Association or company engaged in broadcast/production

of audio, visual news by any electronic mode or form as defined under Sec.2(1)(r) of Information Technology Act, 2000,



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Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



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WEBSITE

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WHICH OF THE TRANSACTIONS FALL OUTSIDE THE PURVIEW OF FCRA: SEC:4

• Government transactions, direct or through Agents.• Scholarships to Indian students, Tuition fees from foreign

students.• Salary, wages, remuneration due to employees from an

organization.• Amounts received from relatives.• Payments for goods received, services given in the ordinary

course of business or under FEMA.• Gift or presentation made to member of Indian Delegation

made in accordance with rules made by Central Govt.



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Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



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RESTRICTIONS AND EXCEPTIONS UNDER THE ACT: Sec.6,7, ,9.

• Prohibition to transfer Foreign Contribution to other person.• Receipt of FC from relatives in excess of Rs.1 Lakh must be informed to

Central Govt.• Exemption in certain cases of emergency medical treatments.• Prohibitions by Central Government in the national interest.• Restrictions on Government servants, Judges, members of legislature etc.

from accepting Foreign Hospitality except in cases of sudden illness.• Prior permission of central government needed by organizations of a

political nature.• No person who is registered or granted prior permission under this Act

and receives any foreign contribution can transfer such foreign contribution to another person unless that person is also registerred, granted prior permission under this Act.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



EMAIL

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WEBSITE

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RESTRICTION ON UTILIZATION OF FOREIGN CONTRIBUTION: Sec.8

• Foreign Contribution :– shall be utilized only for the purpose for which its been received.– FC shall not be used for buying/selling shares, property, chits, loans.– Shall not be used for administrative expenses, an amt. exceeding

50%– Shall maintain a separate register of investments for audit.What is not covered by ‘administrative expenses’:– Salaries of training personnel.– Expenses on collection of field data.– Salaries of doctors of Hospital, teachers of school, if the same is a

welfare organization.



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EMAIL

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REGISTRATION UNDER FCRA,2011: Sec.11 to 14 ,AND OTHER PROCEDURES

• Conditions for: – registration sec.11.– Eligibility for registration.– Procedure of registration.– Documents to be filed.– Grant of registration.– Suspension of registration.– Cancellation of registration.Receipt and Accounts of foreign Contribution: Sec. 17 to

24



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Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



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PENALTIES FOR VIOLATION OF FCRA,2011: Sec:33 to Sec.35

• Making false statement, declaration or maintaining false accounts:– Any person who knowingly under Sec.9(c), Sec.18 gives false intimation,

or;– Seeks prior permission or registration by means of fraud, false

representation or concealment of material fact, – Shall be liable on conviction to imprisonment up to 6 months or with fine

or both.• Sec. 34-Penalty for FC obtained in contravention of prohibition under sec. 10.• Sec.35-Whoever accepts any person, political party or organization in

accepting , any foreign contribution or currency or security from a foreign source in contravention of any provision off this Act shall be punished with imprisonment of a term which may extend up to 5 years and fine or both.

• Fines under Sec.36.• Sec.37-Punishment for contravention of any provision of the act.• Seizure of any FC received in contravention of the act,(sec.25).• Other guidelines to describe political parties/groups under FCRA,2010.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



EMAIL

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WEBSITE

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THANK YOU.

The fcra,2010

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