Govt revises penalties under FCRA involving receipt of foreign contributions by NGOs
The orders were notified by the ministry on Monday under the powers conferred by Section 41(1) of the Act.
The penalty for meeting foreign contributions exceeding 20 per cent of the contributions received for administrative expenses, contrary to Section 8 of the Act, will be Rs 1 lakh or 5 per cent of the amount spent beyond the limit, whichever is higher, the notification said.
Use of foreign contribution in speculative activities, contrary to Section 8(1) of the Act read with rule 4 of the Foreign Contribution (Regulation) Rules, 2011, will now attract a penalty of Rs 1 lakh or 30 per cent of the amount invested in such activities, whichever is higher. The notification also stated that 100 percent of the returns from this will be refunded.
It added that if foreign contribution is used for purposes other than the purpose for which it was received, a penalty of 30 per cent of the amount used for purposes other than the purpose for which such foreign contribution was received or Rs 1 lakh, whichever is higher, will be imposed.
A similar penalty will also be imposed if foreign contributions are accepted or used in violation of the law or if the funds are used for a purpose in a state or Union Territory where it is not registered, it said.
In a separate notification published on Monday, the government also changed the rules for receiving foreign funding, requiring NGOs to choose from a pre-defined list of purposes and areas of activity; While allowing a range of faith-based activities, it expressly excluded proselytizing from various categories eligible for registration under the Act. The ministry also said that due to its key functionaries, any association of foreign nationality, other than those of Indian origin, “will not normally be considered” for registration under the Act or prior permission to receive foreign funds.
The amended rules create an exception and allow the government to specify such cases or circumstances through an order under which foreign nationals may be permitted to become “key officers” of an association for registration or prior authorization under the FCRA, the notification said.
The government has notified a series of amendments to the FCRA Rules, 2011, tightening liability for how NGOs and other associations in India receive and use foreign money.
The amendments expanded the definition of “key officer in relation to a person other than an individual” to a wide range of roles, including company directors, firm partners, trustees, the “Karta” of the Undivided Hindu Family and any person who has control over the management of the association.
The government has introduced a new clause that NGOs seeking to register to receive foreign funds must specify the precise purpose of their activities and their state and Union territory.
“Each application for registration shall state only the purpose or purposes for which registration is sought, selected from the list of purposes specified in the Schedule annexed to these rules, and the states or Union territories in which the society proposes to undertake activities,” the notification said. It was said.
It was also stated that the details will be stated in the certificate issued to the NGO.
Applicants must now choose their activities from a “Programme” set out in the rules, covering religious, cultural, economic, educational and social categories as purposes.
A variety of activities are listed under religious purposes, from the construction, renovation and maintenance of religious places to religious education to the promotion of worship music.
The rules state that three objectives (religious education, documentation of faith traditions, and preservation of indigenous beliefs) must be achieved “with the exception of religious propaganda.”
This is also noted in “the documentation, preservation, and revival of indigenous and tribal belief practices, rituals, and systems of worship” and “the conduct of religious education, moral education, satsangs, discourses, and meditation retreats.”
NGOs receiving foreign funding are now required to provide details of their social media accounts when applying for registration or renewal under the FCRA.
The rules give all associations registered before 2026 a year to explain their specific purposes to the government and indicate what they want to keep on their registers.
The government has also introduced a fee structure under the amended rules under which an additional fee of Rs 300 will be charged for each additional case or purpose added to the application.
To prevent inactive NGOs from getting licences, the government has imposed a minimum spending limit of Rs 10 lakh on external contributions for their chosen activities in the last two financial years.
In order for an NGO to renew its registration or avoid cancellation, it must have spent the amount of contribution from abroad in the last two years on its chosen activities.
In the statement, it was stated that the second or subsequent funding installments will be released to NGOs that receive foreign funds for a specific purpose under “Preliminary Authorization” only after at least 75 percent of the previous installment has been used.
It was stated that the government will conduct a field study to verify the use.
If money comes through “intermediary remittances” or “donor-advised funds,” NGOs must disclose the ultimate donors (the original source of the money) in their applications.
Under the rules, annual returns must now include a “detailed activity report” as well as financial statements.
Since NGOs are prohibited from producing or publishing “news or current affairs”, they will have to declare whether any books or articles or keys thereto have been published by them.
