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The Foreign Contribution (Regulation) Act, 2010 (FCRA) is a law that controls how organisations in India receive and use money or materials from foreign sources. Any NGO, trust, or society that wants to accept foreign donations must register under FCRA and follow strict rules set by the Ministry of Home Affairs (MHA).
If your NGO receives any foreign funding, even a small grant from an international organisation, FCRA rules apply to you. Not knowing the rules is not a defence. Violations can lead to suspension, cancellation of your FCRA registration, or even criminal prosecution.
This guide breaks down the latest FCRA rules that every NGO should know, written in plain language so you can take the right steps without confusion.
What Is FCRA and Who Needs to Register?
FCRA stands for the Foreign Contribution (Regulation) Act. It was enacted to ensure that foreign money does not influence India’s political, economic, educational, or religious environment in ways that are not in the national interest.
You need FCRA registration if your organisation:
- Receives donations, grants, or contributions from foreign citizens, foreign companies, or international organisations
- Plans to receive such contributions in the future
- Acts as an agent or associate of a foreign entity
Without valid FCRA registration, receiving foreign funds is illegal, regardless of how noble your cause is.
Key FCRA Rules Every NGO Must Follow
1. Only One Designated FCRA Bank Account Allowed
This is one of the most important FCRA rules for NGOs after the 2020 amendment. All foreign contributions must be received only in a designated FCRA account at the State Bank of India (SBI), New Delhi Main Branch. You cannot use any other bank for this purpose.
You may, however, open utilisation accounts at other banks after the funds are transferred from the SBI FCRA account. But the initial receipt must happen only in the SBI account.
2. FCRA Funds Cannot Be Mixed with Domestic Funds
A very common mistake NGOs make is combining their FCRA funds with domestic donations or government grants. This is not allowed. Your FCRA account must be kept separate at all times. Mixing funds can lead to legal trouble and cancellation of your registration.
3. Administrative Expenses Cap at 20%
After the 2020 amendment, NGOs cannot spend more than 20% of foreign contributions on administrative expenses. Administrative costs include salaries of staff not directly working on the project, office rent, utility bills, and general overheads.
Previously this limit was 50%, so this is a significant tightening of the rules. If you exceed the 20% cap, it is treated as a violation.
4. Sub-Granting to Other Organisations Is Now Restricted
Under the original FCRA framework, an NGO with FCRA registration could pass foreign funds to another NGO. The 2020 amendment changed this. You can no longer transfer FCRA funds to any other person or organisation. Each NGO must use the funds directly for its own activities.
This rule has created challenges for larger NGOs that work through grassroots partners. If your model involves passing grants to other NGOs, you need to re-examine your operations immediately.
5. Aadhaar Mandatory for All Office Bearers
As part of stricter know-your-organisation norms, all office bearers, trustees, and key members of an FCRA-registered NGO must submit their Aadhaar number. Foreign nationals associated with the organisation must provide a copy of their passport or Overseas Citizen of India (OCI) card.
This requirement applies at the time of registration, renewal, and when filing annual returns.
6. FCRA Registration Renewal Every Five Years
FCRA registration is not permanent. It must be renewed every five years. The renewal application must be submitted at least six months before the expiry date, through the official FCRA Online portal managed by the Ministry of Home Affairs.
If you miss the renewal deadline or your application is rejected, your registration lapses and you can no longer legally receive foreign funds. Many NGOs have lost their registration simply by missing this window.
7. Annual Returns Must Be Filed by 31st December
Every FCRA-registered NGO must file an annual return in FC-4 form on the FCRA Online portal. The filing deadline is 31st December each year, covering the previous financial year (April to March). You also need to upload your audited statements of accounts along with this filing.
Failure to file on time invites penalties and can be grounds for cancellation.
What Changed After the FCRA Amendment 2020?
The Foreign Contribution (Regulation) Amendment Act, 2020 brought some of the most significant changes since the original law was passed. Here is a quick summary of what changed:
| Rule | Before 2020 | After 2020 Amendment |
| Admin expense cap | Up to 50% | Reduced to 20% |
| FCRA bank | Any scheduled bank | Only SBI New Delhi Main Branch |
| Sub-granting | Permitted to other NGOs | Completely prohibited |
| Aadhaar requirement | Not mandatory | Mandatory for all office bearers |
| Government employee association | No restriction | Government employees cannot be members |
How to Check If Your NGO Is FCRA Compliant Right Now
You do not need to wait for an audit to know if your NGO is at risk. Here is a quick self-check:
- Is your FCRA registration still valid and not expired?
- Are all foreign funds being received only in the SBI FCRA account?
- Are your administrative expenses within the 20% limit?
- Have you filed your most recent annual return (FC-4) on time?
- Have all office bearers submitted their Aadhaar details?
- Is your NGO listed as active on the FCRA Online portal?
- Are you keeping FCRA and domestic funds completely separate?
If you answered ‘No’ or ‘Not sure’ to any of the above, there are gaps you need to address before they become serious problems.
What Happens If Your NGO Violates FCRA Rules?
FCRA violations are not treated lightly by the Ministry of Home Affairs. The consequences can include:
- Suspension of your FCRA registration while an inquiry is conducted
- Cancellation of FCRA registration, which can be permanent
- Freezing of the designated FCRA bank account
- Criminal prosecution under Section 35 of the FCRA Act
- Reputational damage that affects future donor trust and grant eligibility
Once an FCRA registration is cancelled, the NGO generally cannot reapply for three years. For many organisations, this effectively means shutting down their international programmes.
Is Prior Permission Better Than Full FCRA Registration?
For NGOs that are not yet eligible for full FCRA registration, or are just starting out, there is an option called Prior Permission. This allows you to receive a specific foreign contribution from a named donor for a specific project.
Here is when Prior Permission makes sense:
- Your NGO is less than three years old (full registration requires at least three years of existence)
- You have a specific one-time grant to receive
- You want to test operations before committing to full registration
Prior Permission is valid only for the specific donor and project mentioned in the application. It does not allow you to receive unrestricted foreign funds.
| Need Help Staying FCRA Compliant? FCRA compliance is not something you want to navigate alone. The rules have become stricter, the penalties are serious, and even small administrative oversights can lead to serious consequences. If you are unsure about your NGO’s compliance status, renewal timelines, or how to handle the new banking requirements, speaking with an experienced FCRA consultant can save you a lot of trouble. A professional review takes far less time and cost than dealing with a suspension or cancellation later. Feel free to reach out for a no-pressure consultation. |
Frequently Asked Questions About FCRA Rules for NGOs
Q: Which bank account is mandatory for receiving FCRA funds?
A: As per the 2020 amendment, all foreign contributions must be received only in a designated FCRA account at the State Bank of India (SBI), New Delhi Main Branch. No other bank is permitted for this purpose, though you can use other banks for utilisation accounts after the initial transfer.
Q: Can an NGO give FCRA money to another NGO?
A: No. After the FCRA Amendment 2020, transferring or sub-granting foreign contributions to any other person or organisation is completely prohibited. Each FCRA-registered NGO must use the funds for its own activities only.
Q: What is the deadline to renew FCRA registration?
A: The renewal application must be filed at least six months before the expiry of the current registration. FCRA registration is valid for five years and must be renewed through the FCRA Online portal of the Ministry of Home Affairs.
Q: What percentage of FCRA funds can be spent on administration?
A: The 2020 amendment capped administrative expenses at 20% of total foreign contributions received. This includes salaries of non-project staff, rent, and overheads. The earlier limit was 50%.
Q: What happens if an NGO misses the annual FCRA return deadline?
A: Missing the 31st December deadline for filing the FC-4 annual return can attract penalties and may be used as grounds for suspension or cancellation of FCRA registration by the Ministry of Home Affairs.
Q: Is Aadhaar mandatory for FCRA registration?
A: Yes. All office bearers and key functionaries of an FCRA-registered organisation must provide their Aadhaar number. Foreign nationals must submit their passport or OCI card details. This is required for registration, renewal, and annual filings.
Q: Can a newly formed NGO get FCRA registration?
A: A new NGO cannot apply for full FCRA registration until it has been in existence for at least three years and has spent a minimum of Rs. 15 lakh on its activities. However, it can apply for Prior Permission to receive a specific foreign grant before that period.
Useful Links
All official sources and resources mentioned in this post:
- FCRA Online Portal (Ministry of Home Affairs): https://fcraonline.nic.in
- FCRA Annual Return Filing (FC-4 Form): https://fcraonline.nic.in/fc4_returns.aspx
- FCRA Registration and Renewal: https://fcraonline.nic.in/home/index.aspx
- Ministry of Home Affairs (MHA) Official Website: https://mha.gov.in
- Foreign Contribution (Regulation) Act, 2010 – Full Text: https://legislative.gov.in/sites/default/files/A2010-42.pdf
- FCRA Amendment Act 2020 – Gazette Notification: https://egazette.nic.in/WriteReadData/2020/222232.pdf
- SBI New Delhi Main Branch – FCRA Account Details: https://fcraonline.nic.in/SBIFCRACircular.pdf
- NITI Aayog NGO Darpan Portal (NGO Registration): https://ngodarpan.gov.in
This article is for informational purposes only and does not constitute legal advice. Always consult a qualified FCRA advisor for your specific situation.
