Organizations listed under the Foreign Contribution Regulation Act must hold different records under the head office of the FC and give a report in the prescribed template to the Ministry along with the audited report of records of the previous year. Any company obtaining foreign donations is expected to have a certificate from a CA. The certificate to be issued by the CA is offered in the form FC-6. In addition to this document, the audited Balance Sheet, Revenue & Expense Statement and the collection and payment account statement, together with the certification and verification approved by the Chief Functionary, will also be issued.
FCRA Annual Returns process can be complex.
We can make this simple & Hassle Free
Step by step assistance
For Business-man & Consultants
Our services are quick & affordable
The return is to be submitted for each financial year (1st April to 31st March) within 9 months of the end of the year, i.e. by 31st December of each year. The filing of a ' 0 ' refund, even though no international donation is received / used throughout the year, is compulsory. The report shall be issued in the specified form FC–6 accordingly followed by the balance sheet and the revenue and expenditure statement approved by the Chartered Accountant. On the grounds of the appropriate accounts and receipts, the chartered accountant is expected to report the following:
200+
550+
2009
700+
What is foreign contribution?
Foreign contribution has been defined in Section 2(1)(h) of FCRA, 2010. However, foreign contribution excludes earnings from foreign client(s) by an association in lieu of goods sold or services rendered by it as this is a transaction of commercial nature.
Who cannot receive foreign contribution?
As defined in Section 3(1) of FCRA, 2010, foreign contribution cannot be accepted by any
|
|
What are the type of FCRA registrations?
| Regular registration (Apply inform F.C 3) | Prior permissionregistration (Apply in Form F.C 4) - |
|---|---|
|
|
What are the eligibility criteria for grant of prior permission?
An Organization in formative stage is not eligible for registration. Such Organization may apply for grant of prior permission under the law. Prior permission is granted for receipt of specific amount from specific donor for carrying out specific activities/projects. For this purpose, the association should:
What is the accounting method for foreign contribution received in kind ?
As per rule 8(1)(a), account has to be maintained for foreign contribution received in kind. Form FC-6 provides the format for recording the receipt as well as the utilisation of contributions received in kind. The entries made in FC-6 should correspond with entries made in Form FC-3.
Does FCRA impose 'cash basis' method of accounting?
No, FCRA does not impose any particular method of accounting. But it does have certain specific reporting requirements, which have to be complied diligently.
What documents are required to be filed annually?
Every organisation which receives foreign contributions shall file an annual return in Form FC-3 under rule 8(2) within 120 days of the closure of the year.
The following should be submitted in duplicate duly signed by the chief functionary and certified by the chartered accountant:
It is necessary to file annual return even when the organisation does not receive any foreign contribution ?
If an organisation having FCRA Registration does not receive any foreign contribution, even then it should file nil returns. It is mandatory to file Form FC-3 every year as long as the organisation wants to validly retain its registration. The Ministry of Home Affairs (FCRA division) in its press notes dated 09.01.1998 has specifically clarified that even if no foreign contribution is received, filing of nil return is mandatory. In the same press note it has been clarified that non-submission of return in time or furnishing of false submission would constitute violation of the provision of the Act and attract penal consequences.
What is the implication for delay in filing of annual return?
FCRA is silent about consequences for delay in filing FC-3. It can be construed that an NGO would stand the risk of losing the FCRA registration if it does not file returns properly but whenever an NGO is not able to file FC-3 by 31st of July, it should write a letter to the FCRA office explaining the circumstances causing the delay. Normally FCRA authorities condone such delay in filing of returns.
Do Not Delay in filling FC6, else pay heavy penalty previously, Is there any penalty?
Delay in Filing FC-6 : FCRA is silent about consequences for delay in filing FC-6. It can be constructed that an NGO would stand the risk of losing the FCRA registration if it does not file returns properly but whenever an NGO is not able to file FC-6 by 31st December, it should write a letter to the FCRA office explaining the circumstances causing the delay. Normally FCRA authorities condone such delay in filing of returns. SO No, there is no such late filling penalty under FCRA Act. Before FC6, Organization having FC registration has to file FC3. However there is no such penalty for Late filling of either FC3 or FC6.
Last Date of Filling FC6 : As we aware Annual return of FCRA has to be filled before 31st December of following the financial year. e.g. for FY 201213, last date for filling FC6 is 31/12/2013. As many organizations are not enthusiastic to file FC6 return on time duration, which is 9 months after completion of Financial Year, Home Ministry has taken this kind of harsh decision to take penalty for such kind of delays. However new penal Provision has been introduced by notification:
| Delay in filling return | Amount of Penalty |
|---|---|
| Beofre 31st December | No Penalty |
| Up to 90 Days after 31st December(in case of non leap year – before 31st March and in case of leap year – before 30th March) | 2% of Foreign Contribution received During the respected Financial Year OR Rs. 10,000 whichever is higher |
| From 91 Days to 180 days after 31st December(in case of non leap year – before 29th June and in case of leap year – before 28th June) | 3% of Foreign Contribution received During the respected Financial Year OR Rs. 20,000 whichever is higher. |
| After 181 Days from 31st December(in case of non leap year – After 29th June and in case of leap year – After 28th June) | In this case there are two types of monetary penalties ONE 5% of Foreign Contribution received During the respected Financial Year OR Rs. 50,000 whichever is higher TWO Rs. 500 per day for each day after 181 days from 31st December. |
What are the common offences, which are subject to severe penalty and punishment?
NGO’s receiving foreign contributions should guard against violating the provisions of FCRA. The following are a few common offences, which aresubject to severe penalty and punishment:
What are the Penalties punishments under FCRA?
To sum up the discussions: Violation of FCRA can attract severe penalties which could be as under :
Comparative feature of different type of business entity; Compare Business Types; Limited Liability Partnership; Private Limited Company; Partnership; Sole Proprietorship
Read More
Private Limited Company Compliance Due Dates in a Year; Roc and Income tax. Company Act Compliance; Company Secretarial Retainership Service; Company secretarial retainership services account ...
Read More
Auditor Appointment for Newly incorporated Private Limited Company; Mandatory Annual Compliance for a Private Limited Company - Financial Year 2020-21,Company Registration; GST Registration; Filing ...
Read MoreWe are the exclusive member in India of the Association of International Tax Consultants, an association of independent professional firms represented throughout Europe, US, Canada, South Africa, Australia and Asia.
All the information related to any client is considered confidential and never be disclosed to anyone.
Having years of experience in respective areas and backed by skilled and experienced workforce keep us ahead.
We believe in the building the good relationship with the clients that ensures the great impression.
If you are not happy with our services then you can request a refund within 30 days.
We provide 24*7 supports through phone, email and live chat.
You can pay online through EMIs, PayPal, net banking, debit card, credit card and more.
We are the exclusive member in India of the Association of International Tax Consultants, an association of independent professional firms represented throughout Europe, US, Canada, South Africa, Australia and Asia.
