FCRA Registration Renewal

The Foreign Contribution Regulation Act (2010), the sword that hang above the heads of the voluntary organizations in India for the last few years, finally became a reality on May 01, 2011. Significant changes in the new FCRA law is as follows;
1. Need for renewal of registration after every five years: Those who are already registered will require renewal only after five years, but we need to prepare ourselves. Along with sending the hard copies of the documents, we also need to apply online. VANI is trying to get a tracking system introduced in the online process so that accountability of the department is ensured and there are no incidences where documents get lost. The registration can be canceled due to non-compliance with the FCRA law, false information or doing something which is against national interest. It is highly recommended that VOs regularly submit required documents in time. There are instances where ‘nil’ returns are not filed if foreign currency is not received. This leads to complications, therefore submission of nil returns is very crucial.
2. Organizations engaged in political activities and those who, as a means of protest, take up actions which might eventually lead to violence can also be denied the FCRA. If in the organizational mission or in the actions of the organizations it is evident that organizations aspire to achieve a political goal then FCRA approval could be denied. If decision of the department is arbitrary then, the concerned VO must have enough data to litigate. We must ensure that none of the genuine organizations engaged in social-economic change are harassed.
3. In line with Income Tax Act, the FCRA now requires records of six years to be stored for scrutiny. As per the act,, investigating agency cannot demand papers for more than six years.
4. The onus to ensure the source of the currency whether it is foreign or Indian, is on the receiving agency. Hence, from now on, we must have it in writing from the donor whether the currency that we receive falls under FCRA. This is very important, as companies having foreign equity more than fifty percent will be considered as foreign.
5. No permission from department is required if funds are transferred from FCRA holder to another FCRA holder, but we need to ensure that recipient organizations are not defaulters with the department. Permission will be required if funds are being transferred to non-FCRA organization.
6. The provision of deemed permission is gone, so ensuring timeliness from the department is very necessary. Therefore, we suggest that after submitting the documents for FCRA registration either for permanent or prior permission, organizations must keep tab of the time and in case of failure write to department with documentary evidence of the application.
7. Another change is that banks holding FCRA accounts will send their annual statement to the department. This statement will also be submitted along with other required documents by the voluntary organizations.
8. Anyone receiving more than one crore as foreign money is expected to share information through its website.