FOREIGN CONTRIBUTION REGULATION ACT (FCRA)

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In News

• The Union Ministry of Home Affairs has amended the Foreign Contribution Regulation Act (FCRA) to provide certain relaxations.
• The new rule allowed relatives to send Rs 10 lakh (earlier it was Rs 1 lakh) to India without informing the government.
  • In case the amount limit exceeds, then the individuals will get 3 months to inform the government, earlier it was 30-days
• It will provide more time to the organisations to inform the government about the opening of bank accounts for the utilization of funds received under the ‘registration’ or ‘prior permission’ category.
• The provision to declare foreign contributions by the organisation/individual at every quarter on its official website has been removed.

 

Foreign Contribution Regulation Act

• The Foreign Contribution Regulation Act was passed by the Indian Parliament in 2010.
  • The act regulates the foreign contribution by individuals or associations or companies.
• The Union Minister of Home Affairs introduced the Foreign Contribution (Regulation) Amendment Bill in 2020, which made several changes.

Foreign Contribution (Regulation) Amendment Act, 2020

• The Act regulates the acceptance and utilisation of foreign contributions by individuals, associations and companies.
  • Foreign contribution is the donation or transfer of any currency, security or article (of beyond a specified value) by a foreign source.
• Prohibition to accept foreign Contributions: Certain persons are prohibited to accept any foreign contribution. These include:
  • Election candidates, editor or publisher of a newspaper, judges, government servants, members of any legislature, and political parties, among others.
  • The Bill adds public servants (as defined under the Indian Penal Code) to this list. A public servant includes any person who is in service or paid by the government or remunerated by the government for the performance of any public duty.
• Transfer of foreign Contributions
  • Foreign contribution cannot be transferred to any other person unless such person is also registered to accept foreign contribution (or has obtained prior permission under the Act to obtain foreign contribution).
  • The Act prohibited the transfer of foreign contributions to any other person. The term ‘person’ under the Act includes an individual, an association, or a registered company.
• Aadhar for registration
  • Any person seeking registration (or renewal of such registration) or prior permission for receiving a foreign contribution must make an application to the central government in the prescribed manner.
  • The Act adds that any person seeking prior permission, registration or renewal of registration must provide the Aadhar number of all its office bearers, directors or key functionaries, as an identification document.
  • In the case of a foreigner, they must provide a copy of their passport or the Overseas Citizen of India card for identification.
• FCRA Account
  • Foreign contributions must be received only in an account designated by the bank as an “FCRA account” in such a branch of the State Bank of India, New Delhi, as notified by the central government.
  • No funds other than the foreign contribution should be received or deposited in this account.
  • The person may open another FCRA account in any scheduled bank of their choice for keeping or utilising the received contribution.
• Restriction in the utilisation of foreign contribution
  • The Government may restrict the usage of unutilised foreign contributions for persons who have been granted prior permission to receive such contributions.
• Renewal of licence
  • Every person who has been given a certificate of registration must renew the certificate within 6 months of expiration.
  • The Act provides that the government may conduct an inquiry before renewing the certificate.
• Reduction in use of foreign contributions for administrative purposes
  • A person who receives a foreign contribution must use it only for the purpose for which the contribution is received.
  • They must not use more than 20% of the contribution for meeting administrative expenses (earlier it was 50%).
• Suspension of Registration
  • Earlier governments may suspend the registration of a person for a period not exceeding 180 days.
  • The Act adds that such suspension may be extended up to an additional 180 days.

 

https://newsonair.gov.in/News?title=Centre-amends-FCRA-allowing-Indians-to-receive-up-to-Rs-ten-lakh-without-informing-Authorities&id=443548

https://www.thehindu.com/news/national/relatives-living-abroad-can-send-up-to-10-lakh-to-indians-under-amended-fcra-rules/article65595715.ece

 

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