Home Ministry's Big Move - NGOs Registered Under FCRA Need To Share Details Of Assets Created Using Foreign Funding

The new govt rules require NGOs with FCRA licence to submit details of movable and immovable assets created out of foreign contributions.

New Delhi: The Ministry of Home Affairs (MHA) has introduced significant amendments to the rules governing the submission of annual returns by Non-Governmental Organizations (NGOs) registered under the Foreign Contribution Regulation Act (FCRA). These changes require NGOs to furnish detailed information regarding both movable and immovable assets generated using foreign funding. The amendments have been made to the Foreign Contribution Regulation Rules, 2010, through the addition of two clauses, (ba) detailing movable assets created from foreign contributions (as of March 31 of the financial year), and (bb) detailing immovable assets created from foreign contributions (as of March 31 of the financial year), to Form FC-4.

In a notification, the MHA stated, "Exercising the authority granted by section 48 of the Foreign Contribution (Regulation) Act, 2010 (42 of 2010), the Central Government hereby introduces further amendments to the Foreign Contribution (Regulation) Rules, 2011, namely: 1. Title and commencement. — (I) These amendments shall be known as the Foreign Contribution (Regulation) Amendment Rules, 2023. (2) They shall be effective from the date of their publication in the Official Gazette. 2. In the Foreign Contribution (Regulation) Rules, 2011, in Form FC-4, after clause (b) in serial number 3, the following shall be added, namely:— "(ba) Details of movable assets created from foreign Contribution (as of 31st March of the financial year)."

"(bb) Details of immovable properties acquired from foreign contribution (as of 31st March of the financial year)," the notification added.

MHA (Ministry of Home Affairs) amends the Foreign Contribution (Regulation) Rules. Now, NGOs have to submit the details of movable assets created out of foreign contribution (as on 31st March of Financial Year). pic.twitter.com/5bAvn1DhuM

— ANI (@ANI) September 25, 2023

It's important to note that Form FC-4 is completed by NGOs/associations holding FCRA licenses for the submission of their annual returns.

According to the new regulations, individuals such as political parties, members of the legislature, election candidates, judges, government officials, journalists, media houses, and others who were previously prohibited from receiving foreign contributions, will no longer face legal action if they receive foreign funding from relatives abroad and fail to inform the government within 90 days.

As of July 17 this year, there were 16,301 NGOs in the country with a valid FCRA license. Additionally, in the last five years, the FCRA licenses of over 6,600 NGOs have been revoked due to violations of the law. In total, the FCRA licenses of 20,693 NGOs have been cancelled to date.

The FCRA Act underwent amendments in September 2020, which prohibited public servants from receiving foreign funding and mandated Aadhaar for every office-bearer of NGOs. The amended law also limits the use of foreign funds for administrative purposes to 20%, reducing the previous limit of 50%.

Furthermore, the ministry has decided to extend the validity of FCRA licenses for entities whose licenses were due to expire on September 30 and were awaiting renewal, until March 31, 2024.