Understanding “Prior Permission” under FCRA Act
a. An association or an organization can receive foreign contribution even without registration with prior permission from the FCRA department. Foreign funds and materials can only be received under two circumstances-
i. The organization has obtained permanent registration from the FCRA department, or
ii. The association or the organization obtained prior permission from the FCRA department on case to case basis
b. The relevant circumstances- The reference of the term ‘prior permission’ is made in sections 5 and 6 of the FCRA. Prior permission is given on case to case basis and separate permission would be necessary for any subsequent receipt and separate transactions. Generally prior permission will be required under the following circumstances:
i. The organization does not have permanent FCRA registration number.
ii. The FCRA registration number has been cancelled by the Government.
iii. The association is instructed by the Central Government to take prior permission under the provisions of section 10 where power have been provided to prohibit any organization from receiving foreign funds.
iv. The FCRA number is suspended due to violation of the provisions and conditions specified under the FCRA.
v. The organization is of political nature not being a political party.
vi. Any person resident in India or any citizen of India resident outside India, receiving foreign funds on behalf of an organization of political nature.
Procedure to Get Prior Permission from the Central government for the Acceptance of Foreign Contribution
1. Application has to be made in FORM NO. FC-1A to the Ministry of Home Affairs.(for form, refer to Annex 1V)
2. A commitment letter from the donor agency has to be enclosed.
3. A copy of the project report showing the gestation period to be enclosed
4. In actual practice, the Central Government does not given prior permission to an association with a standing of less than three years.
5. In order to obtain prior permission, an association will have to submit form FC-1A duly filled up in triplicate and will have enclose the following documents:-
A. Certificate of Registration issued by the Registrar of the Societies. (True copy)
B. Memorandum of Association & Rules and Regulation of Society, Registered trust deed charter.
C. Letter of commitment as to grant from foreign donor agreeing in principle the provide funds to the Society as per project report. (in original)
D. Project profile for which foreign contribution is desired specifying the purpose geographical area, details of beneficiaries and amount required (both for capital and recurring expenditure for implementation of the project).
E. Audit Report & Balance Sheet of Accounts of association for the previous three years or for the years (s) ended…….
F. Report on the activities of the association from the date of registration
G. Copy of exemption certificate issued to association U/s. 80G, 12A, etc. of the Income Tax Act, 1961
H. Utilization schedule of the foreign fund.
I. Copy of any prior permission obtained earlier by the association.
J. Resolution passed by the Governing Body of association agreeing to apply for FCRA prior permission.
K. Copy of power of Attomey/Resolution of the Governing Body authorizing Chief functionary to sing form FC-1A, and other papers.
L. Copy of any journal, bulletin published by the association with R.N. NO., if any.
M. List of the present members of the Governing body of the society and the office-bearers.
Availability of forms
The forms can be obtained, free of cost, from the below-mentioned address. The forms are also available on the Ministry of Home affairs’
e. Where should the application be sent?
The application for seeking prior permission or registration are to be sent by registered post to the Secretary, Ministry of Home Affairs, FCRA Division LOK Nayak Bhavan, Khan Market, New Delhi-110003.
f. How much time is taken to dispose of application?
Applications for registration are normally disposed off within six months. Applications seeking prior permission are disposed off within 90/120 days.
Filing of Returns & Reports
a. All associations permitted to accept foreign contribution are required to submit the annual returns, duly certified by a Chartered Accountant, giving details of the receipts and purpose-wide utilization of foreign contribution. The return has to be filed for every year (1st April to 31st March) within a period of four months from the closure of the year i.e. by 31st July of each year.
b. The return has to be submitted, in duplicate, in form FC-3. It has to be accompanied with the balance sheet & statement of receipt and payments, duly certified by a Chartered Accountant, also in duplicate.
c. Following documents are to be attached along with Form No. FC-3:
i. Copy of Balance Sheet
ii. Copy of Receipts and Payments Account
iii. Copy of the list of contributions received in kind