The Foreign Contribution (Regulation) Act, 2010 (FCRA) mandates that organizations receiving foreign contributions in India file an annual return known as Form FC-4. This essential filing helps the government monitor foreign funds, ensuring transparency and compliance within the non-profit sector. Here’s everything you need to know about Form FC-4, including who must file, key deadlines, implications of non-compliance, and common challenges faced by NGOs.
Who Should File? All non-governmental organizations (NGOs), charitable trusts, societies, and other entities registered / with prior permission under FCRA and receiving foreign contributions during the financial year are required to file Form FC-4. 1. It's important to note that even if no transactions occur in a given year, a NIL return is still required to be filed (Refer Q3 from the FCRA FAQs - Section V - Filing of Annual Returns).
When to File? The due date for submitting Form FC-4 is within nine months of the closure of the financial year. For the financial year 2023-24, this means the deadline is December 31, 2024.
Where to File? Filings are done online through the FCRA portal at fcraonline.nic.in. by logging into the organisations account. Key Aspects to Remember When Filing Form FC-4
Details Required: Some of the details to be kept ready for filing the form FC-4 are given below”
Total foreign contributions received
Purpose of fund utilization, broken down by expenditure categories (e.g., administrative costs, program expenses).
Balance of Unutilized funds in fixed deposits / bank .
Interest accrued on foreign contributions.
Bank account details, specifically the designated FCRA account and utilization accounts.
Information about donors, including name, address, country of origin, and contribution amount.
A declaration and digital signature from the Chief Functionary or authorized signatory.
Supporting documents such as a certified statement of accounts, an audit report, and certified bank statements For more details, refer the attached full form: FC-4
Reporting Contributions Accurately:
Failing to report the sources of foreign contributions accurately can have severe consequences, including fines, suspension of registration, and legal liabilities. Maintain meticulous records, utilize accounting software, conduct regular audits, and ensure staff are well-trained in compliance.
When filing the annual return, use standalone audited financials specific to FCRA activities, rather than consolidated financials that include domestic accounts. Ensure that the receipts, utilizations, and balances reported align with the audited standalone FCRA financials, based on actual cash flow rather than an accrual basis.
Updating Information within prescribed timelines: Any changes to your organization’s details, such as address, key members, or bank account information, change in name/nature/object/registration if any, etc. must be updated in the FCRA system (within prescribed timelines) before filing. Neglecting to do so can result in significant penalties.
Mandatory Audit Requirements
FCRA associations must maintain a separate set of books for foreign contributions received and utilized, which should be audited. The audited financials, including income & expenditure statements, receipt & payment accounts, and balance sheets, must be uploaded on the FCRA portal along with the annual return
File Size Limits: When submitting documents, adhere to the specified size limits:
Duly signed and seal Chartered Accountant’s certificate (with C.A registration number) : Max 1 MB (PDF).
Declaration Certificate of Chief Functionary.: Max 1 MB (PDF).
Audited Statement of Accounts(It should contain Payment Account, Income and Expenditure Statement, and Balance Sheet). Max 50 MB.
Statement of Account from Bank duly certified by officer of such bank. Max 10 MB.
Signature image: Max 50 KB (JPG/JPEG).
Official seal image: Max 100 KB (JPG/JPEG).
Filing Process:
File Form FC-4 online through the FCRA portal. After submission, ensure you receive an acknowledgment for future reference. Check the status of your filing on the portal to confirm successful processing and take the screenshot of the same for future reference.
Penalties for Non-Compliance:
Timely filing of Form FC-4 is crucial to maintaining compliance. Penalties for late filing can include:
A penalty of higher of ₹1,00,000 or 5% of the foreign contributions received during the relevant year. However, it is important to note that the amount of penalty shall not be more than the value of the foreign contribution received during the relevant year. For example, if XYZ organization received ₹10,000 in the financial year 2023-24, the penalty would be capped at ₹10,000, even though 5% of ₹10,000 is ₹500, and ₹1,00,000 is the higher amount.
Potential suspension or cancellation of FCRA registration for persistent non-compliance.
Restrictions on future funding without valid FCRA registration.
Could be a ground to deny FCRA renewal [Refer MHA Public Note dated 8.11.2024]
Need Expert Guidance! Navigating FCRA compliance can be complex, and even minor errors can lead to significant consequences. To ensure your organization adheres to all FCRA regulations seamlessly, consider consulting with a subject matter expert.
At Aria, our team of compliance specialists is here to help you understand and implement FCRA guidelines effectively. From registration and renewals to financial management and reporting, Aria offers comprehensive consultancy services tailored to your needs. Contact us today to safeguard your organization’s foreign contributions and ensure full compliance with FCRA laws.
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