INDIA: Foreigners can remit up to 10 lakhs; India has amended the Foreign Contribution Control Act (FCRA).

India: Those who have acquired foreign citizenship can now send up to 10 lakh rupees annually to their relatives in the country without informing the central government. The Central Government amended the Foreign Contribution Control Act (FCRA) in 2011 for this purpose. Currently the limit for this was Rs.1 lakh. *FCRA rules are not applicable for remittances to Indian citizens residing abroad.

Renamed the Foreign Contribution (Control) Amendment Rules, 2022, the Ministry of Home Affairs (MHA) issued a notification on Friday (July 1) and published it in the Official Gazette. The new rules are an amendment to the Foreign Contribution (Regulation) Rules, 2011.

Till now, the rule was that foreign nationals should inform the center within 30 days through form FC-1 if they send more than one lakh rupees in a year to their relatives in the country. As per the new amendment, the time limit for reporting through FC-1 form has been extended from 30 days to 3 months if remittances exceed Rs 10 lakh in a year. There is no change in the current provision of informing the central government if the value of gifts sent from abroad exceeds Rs 1 lakh.

This Act applies to citizens of India and to citizens of India outside India. Associate branches or subsidiaries outside India of companies or corporations registered or incorporated in India are also required to comply with the rules of the Act.

Q.8 Whether donation given by Non-Resident Indians (NRIs) is treated

as ‘foreign contribution’?

Ans. Contributions made by a citizen of India living in another

country (i.e., Non-Resident Indian), from his personal savings,

through the normal banking channels, is not treated as foreign

contribution. However, while accepting any donations from such NRI, it

is advisable to obtain his passport details to ascertain that he/she

is an Indian passport holder.

Q.9 Whether donation given by an individual of Indian origin and

having foreign nationality is treated as ‘foreign contribution’?

Ans. Yes. Donation from an Indian who has acquired foreign

citizenship is treated as foreign contribution. This will also apply

to PIO card holders and to Overseas Citizens of India. However, this

*will not apply to 'Non-resident Indians', who still hold Indian

citizenship.

The FCRA regulates foreign contributions and ensures that such contributions do not adversely affect internal security. First enacted in 1976, it was amended in 2010 when new measures were taken to regulate foreign donations.

FCRA applies to all associations, groups and NGOs that intend to receive foreign donations. All such NGOs are required to register themselves under FCRA.

Registration is initially valid for five years and can be renewed thereafter if all criteria are met. Registered associations can accept foreign donations for social, educational, religious, economic and cultural purposes.

Filing of annual return is mandatory under Income Tax. In 2015, the MHA notified new rules requiring NGOs to ensure that acceptance of foreign funds does not prejudice India's sovereignty and integrity, affect friendly relations with any foreign country or disturb communal harmony. It said all such NGOs should operate accounts in nationalized or private banks with core banking facilities to allow real-time access to security agencies.

Members of the legislature and political parties, government officials, judges and media persons are prohibited from accepting foreign donations.

FCRA registration can be suspended for 180 days by MHA on verification of accounts and receiving any adverse input against the functioning of the association. Until a decision is taken, the association cannot accept any new donations and cannot use more than 25 percent of the amount available in the designated bank account without the approval of the MHA. The MHA can cancel the registration of an organization that is not eligible for registration or 'prior approval' for a period of three years from the date of cancellation.

Other changes

The time limit of the requirement to inform the Secretary of the Ministry of Home Affairs within 15 days of the details of the bank accounts opened to utilize the money received as foreign donation has been extended to 45 days.

The requirement to publish the information on the foreign donation received on the website within 15 days of every 3 months has been waived. Instead, it is enough to publish them together in one financial year.

Any change in the bank accounts, address, name, objectives of the organization and principal officers of those authorized to receive foreign donations need to be reported within 45 days. So far it has been 15 days.

What is the purpose of FCRA??

Parliament passed the FCRA to consolidate the Act to regulate the flow of foreign.

• Acceptance and use of foreign contribution or foreign hospitality
• Prohibit acceptance and disposal by individuals, associations or companies
• Foreign contribution or foreign hospitality to any activities prejudicial to the national interest is defined as restriction of the flow of foreign for matters related or incidental thereto.

Form FC-1 ?

As per the new rules, those who receive more than Rs 10 lakh from their foreign relatives can go to the FCRA website (fcraonline.nic.in) and open the FCRA Online Form menu and click on Form FC-1. Online forms will be available after 'click to apply'. Information can be entered in this. SEE MORE

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