a. Under section 6 of FCRA, it is clearly provided that any organization having a definite cultural / social / educational / religious/economic object shall only accept foreign contribution after satisfying two conditions:
I. It must register itself with the Central Government.
II. It must aggress to receive foreign contribution only through one specific bank account.
b. It is preferable to have a legal form, i.e., a society, trust etc. by its scope and definition FCRA is applicable to unregistered and oral organizations also but normally registration is granted to registered organization only. Section 6(1) specifically provides that the association should have “a definite cultural, economic, educational, religious or social program…….” Though FCRA is also applicable to unregistered organizations but in the absence of written and authentic documents backed by bye-laws it would be difficult for any association to prove the definiteness of its programs. Therefore, only those organizations which are registered entities are entitled for registration under FCRA.
c. The association applying for registration should have been registered at least three years before the application for registration under FCRA is made.
d. The FCRA department will ask the intelligence bureau for a report. Some authorities from the intelligence bureau may visit the office and the project area of the organization and inspect the books of account and other records available. On the basis of the reports submitted by the intelligence bureau the FCRA department decides whether to accept or reject the application.
e. Application for registration shall be made to the Ministry of Home Affairs in FORM NO FC-8. Following documents shall also be adduced:
i. The memorandum of association/Instrument creating the trust.
ii. A certified copy of the Registration Certificate of the Trust/Society
iii. A report on the Organization’s activities.
iv. A copy of the audited accounts for the last 3 years.
g. In addition to the above, the following details shall be furnished:
i. The name of the religion, if it is a religious organization.
ii. The names and addresses of the important office bearers and the chief functionary.
iii. The name of the bank, branch, address and account number designated by the applicant organization for receiving any foreign contribution. It may be noted that FC transactions can be routed only through this account.
iv. Other particulars as may be prescribed.
Accounts to be maintained under FCRA
1. Separate sets of books are to be maintained in double entry system.
2. Financial year shall be from every April to March
3. For foreign contribution received in kind, accounts are to be maintained in FC-6
4. Regarding foreign securities, accounts shall be maintained in FC-7
5. Only designated bank account can be maintained. Any change thereof has to be intimated to the Central Government.
6. No local funds shall be operated through this bank account.
Punishments and Penalties under FCRA Act
1. A person, who accepts or assists any person to accept foreign contribution in contravention of the Act or Rules, shall be punishable with imprisonment upto 5 years or fine or both.
2. If a person is in possession of any article of value exceeding Rs. 1,000 or any currency in contravention of the Act or Rules, the Central Government can seize such article or currency.
3. The article or currency can also be confiscated. If it is not available for confiscation, fine upto to 5 times the value of the article or currency or Rs. 1,000 whichever is more shall be imposed.
4. In case of offences for which no specific punishment is prescribed, imprisonment up to 1 year or fine up to Rs. 1,000 or both shall be imposed.