Rationalizing Foreign contributions
Bhumesh Verma
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It is common for individuals and organizations to receive funds or monies from overseas sources for various purposes - these remittances are deemed to be foreign contribution. The Foreign Contribution Regulation Act, 2010 (FCRA) regulates the receipt and follow of such foreign contribution into the hands of resident Indians. The underlying intent of this Act is to ensure such foreign contribution comes through fit and proper channels and is not used in detriment to nation’s economic and other interests.
Under the existing rules of FCRA, the recipient Indians need to report to applicable authorities if they receive monies (in the form of foreign contribution) above Rs. 100,000 (one lakh) in a given year. With the intent to provide some relief for receipt of foreign contribution, central government has enhanced this limit by ten times, i.e., up to Rs. 1,000,000 (one million / ten lakhs).
Previously, the reporting period for such foreign contributions was 30 days from the receipt of any foreign contribution – the said timeframe has been modified to 90 days as well.
Government has also allowed Indian individuals to receive up to?Rs. 10 lakhs from relatives residing abroad without notifying the authorities.
Among other key modifications are as follows:
a) Earlier, individuals and organizations were required to seek prior permission from or get the registration of account dedicated to receive foreign contribution within a timeframe of 30 days – which now is extended to 45 days.
b) Recipients of foreign contribution are required to display audited statement of accounts related to such foreign contribution on their website or any other website as specified by central government within a period of 9 months from completion of particular financial year.
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c) In a relief to NGOs, central government has removed requirement of declaration of foreign contributions for every quarter on its website.
?d) The timeline to report key changes associated with foreign contributions is modified to 45 days from date of change – Which is 15 days earlier.
?e) Public servants are prohibited from receiving foreign contribution
?f) Each office bearer of NGOs should have aadhaar and related details.
?These new FCRA changes will provide more leverage to recipients of foreign contribution in terms of usage of such funds and compliance aspects associated with receipt and usage of such foreign contribution.
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Source : The Economic Times