Any trust, society, or Section 8 company in Chennai that wants to receive donations or grants from a foreign source needs FCRA registration first, and the rules around this have tightened considerably in recent years, catching organizations off guard that assumed older, looser norms still applied.
Why FCRA exists and who it applies to
The Foreign Contribution Regulation Act governs how Indian organizations can receive and use funds from foreign sources, including foreign individuals, foreign companies, and international bodies. It applies regardless of the organization's structure, trust, society, or Section 8 company, if the intention is to accept foreign contributions of any kind, including in kind donations, not just cash.
Eligibility conditions before applying
An organization generally needs to have existed and been active for a minimum number of years, have spent a minimum amount on its core charitable activities during that period, and be registered under the relevant law (as a trust, society, or Section 8 company) with clean compliance history before FCRA registration will be granted. Organizations without this track record can sometimes apply for prior permission for a specific foreign contribution instead of full registration.
The mandatory FCRA bank account requirement
All foreign contributions must be received into a designated FCRA account at the specified branch of the State Bank of India in New Delhi, a requirement that surprises many first time applicants who assume they can use any bank. Utilization can then flow through a separate utilization account, but the receipt itself has to go through the designated account.
Ongoing compliance after registration
FCRA registration isn't a one time formality. Registered organizations need to file an annual return disclosing foreign contributions received and utilized, maintain separate books of account for foreign contributions, and renew the registration periodically. Failure to file the annual return or violations of permitted utilization can lead to suspension or cancellation of the registration.
A checklist before applying
- Confirm your organization meets the minimum existence and expenditure history requirements
- Ensure your trust, society, or Section 8 company registration is current and compliant
- Open the mandatory FCRA account at the designated bank branch before applying
- Plan for annual return filing and separate accounting from the start, not as an afterthought
If your Chennai based NGO or trust is planning to accept foreign funding and needs FCRA registration handled correctly, C S Rushil & Co. can guide you through eligibility and the application process. Reach out for a free consultation.