Can a foreign contribution be transferred?
No. A person who has received a foreign contribution under the Foreign Contribution (Regulation) Act, 2010, cannot transfer that contribution to any other person.
What does section 7 bar?
Section 7, after the amendment that took effect on 29 September 2020, says a person who is registered or who has prior permission, and who receives a foreign contribution, shall not transfer it to any other person. The earlier route, under which one registered organisation could pass foreign contribution to another with approval, does not survive that amendment. A memorandum of understanding between two organisations does not reopen it.
Which movement is still allowed?
The contribution is received only in the account designated as the FCRA account, opened at the State Bank of India, New Delhi Main Branch. The same person may then move the money to another account of that person which the Act allows for utilisation. That movement is not a transfer to another person. A section 8 company that receives foreign contribution is still a company, and its company filings are on the section 8 company page.
Who may receive a foreign contribution?
Only a person who holds a valid registration, or who has obtained prior permission for that contribution. The registration certificate is valid for five years and is renewed by a further application. Section 3 bars a candidate for election, a correspondent, editor, or publisher of a registered newspaper, a judge, a government servant, a member of a legislature, and a political party. The office bearers’ identity details, including Aadhaar where the rules require it, are part of the application. They are not a substitute for the bar in section 7.
How is the receipt reported?
The person files an annual return in Form FC-4 by 31 December. The contribution is used only for the purpose for which it was received. Not more than 20 percent of the foreign contribution received in a financial year may be used to meet administrative expenses. The Ministry of Home Affairs can suspend or cancel the certificate for a violation. Company law compliance is a separate set of filings, collected on the stay-compliant page.
Frequently asked questions
Four questions cover a transfer agreement, the organisation’s own account, the five years, and administration.
Can two registered organisations sign a transfer agreement?
An agreement does not restore the old route. Section 7, as amended in 2020, bars the transfer to any other person.
Can the same organisation use another of its own accounts?
Yes. After receipt in the FCRA account at the State Bank of India, New Delhi Main Branch, the same person may move the money to another account of that person which the Act allows for utilisation.
How long does registration last?
The certificate is valid for five years. Renewal is a separate application. Prior permission is the route for a person who is not registered.
What share can be spent on administration?
Not more than 20 percent of the foreign contribution received in a financial year may be used to meet administrative expenses.
Sources
The bar is section 7 of the Foreign Contribution (Regulation) Act, 2010, as amended by the Amendment Act, 2020, in force from 29 September 2020. The designated account is section 17. The annual return is Form FC-4.