Q. 1 What is foreign contribution?
Ans. Foreign contribution has been defined in Section 2(1)(h) of FCRA, 2010. However, foreign contribution excludes earnings from foreign client(s) by an association in lieu of goods sold or services rendered by it as this is a transaction of commercial nature.
Q. 2 Section 2(c)(i) of repealed FCRA, 1976 inter alia defined foreign contribution as the donation, delivery or transfer made by any foreign source of any article, not given to a person as a gift for personal use, if the market value, in India, of such article exceeds one thousand rupees. What limit has been prescribed in FCRA, 2000 in respect of such article?
Ans. Till any limit is fixed in the Rules, foreign contribution has to be understood without any limit.
Q. 3 What is a foreign source?
Ans. Foreign source, as defined in Section 2(1) (j) of FCRA, 2010 includes:-
(i) the Government of any foreign country or territory and any agency of such Government;
(ii) any international agency, not being the United Nations or any of its specialized agencies, the World Bank, International Monetary Fund or such other agency as the Central Government may, by notification, specify in this behalf;
(iii) a foreign company;
(iv) a corporation, not being a foreign company, incorporated in a foreign country or territory;
(v) a multi-national corporation referred to in sub-clause (iv) of clause (g);
(vi) a company within the meaning of the Companies Act, 1956, and more than one-half of the nominal value of its share capital is held, either singly or in the aggregate, by one or more of the following, namely:-
A. the Government of a foreign country or territory;
B. the citizens of a foreign country or territory;
C. corporations incorporated in a foreign country or territory;
D. trusts, societies or other associations of individuals (whether incorporated or not), formed or registered in a foreign country or territory;
E. Foreign company;
(vii) a trade union in any foreign country or territory, whether or not registered in such foreign country or territory;
(viii) a foreign trust or a foreign foundation, by whatever namecalled, or such trust or foundation mainly financed by a foreign or territory;
(ix) a society, club or other association or individuals formed or registered outside India;
(x) a citizen of a foreign country;”
List of agencies of the United Nations, World Bank and some other International agencies/multilateral organisations, which are exempted from the definition of ‘foreign source’, are available on the website http://mha.nic.in/fcra/intro/FCRA-exemptedAgenciesUN.pdf
Q. 4 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. 5 Whether a Company incorporated in India under the Companies Act, 1956 having its operations in 2 or more countries is to be treated as an MNC under FCRA, 2010?
Ans. No. However, the definition of 'foreign source' under section 2(j)(vi)may be seen as explained above as answer to Question 3.
Q. 6 Whether foreigners can be appointed as Executive Committee members?
Ans. Organisations having foreign nationals as members of their executive committees or governing bodies are generally not permitted to receive foreign contribution. However, foreign nationals, fulfilling the following conditions, may be appointed as Executive Committee members, after obtaining prior permission of the Central Government:
(i) the foreigner is married to an Indian citizen;
(ii) the foreigner has been living and working in India for at least five years;
(iii) the foreigner has made available his/her specialized knowledge, especially in the medical and health related fields on a voluntary basis in India, in the past;
(iv) the foreigner is part of the Board of Trustees/Executive Committee in terms of the provisions in an inter-governmental agreement;
(v) the foreigner is part of the Board of Trustee/Executive Committee, in an ex-officio capacity representing a multilateral body which is exempted from the definition of foreign source. The need for such an appointment should, however, be adequately justified.
Q. 7 Whether Government servants, Judges and employees of a Government owned/controlled company/body can be on the executive committees/boards of an association?
Ans. Yes. The legal entity of a 'person' under FCRA, 2010 is distinct from am individual person. Therefore, individuals who cannot receive foreign contribution may happen to be on the executive committees/boards of such an association.
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