Foreign source under the Foreign Contribution (Regulation) Act 2010
- December 6, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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Foreign source under the Foreign Contribution (Regulation) Act 2010
Subject: Economy
Context:
The Union Home Ministry has released a list of 117 organisations whose contribution to Indian entities will not be covered under the Foreign Contribution (Regulation) Act, 2010.
Details:
The UN agencies and other international bodies-“to be not covered” by the definition of “foreign source” under the FCRA among others includes the UN System’s Secretariat, Joint United Nations Programme on HIV/AIDS (UNAIDS),Office of the UN High Commissioner for Human Rights (OHCHR),Office of the UN High Commissioner for Refugees (UNHCR),United Nations Capital Development Fund (UNCDF),United Nations Conference on Trade and Development (UNClAD).
Concept:
Foreign source under the Foreign Contribution (Regulation) Act, 2010
- Indian organisations receiving foreign funds are mandatorily registered under the Foreign Contribution (Regulation) Act, 2010.
- Organisations/associations in India can accept contributions from a “Foreign Source” only if they are registered with the Ministry of Home Affairs or only after obtaining prior permission from the above Ministry.
- The “Foreign Source” has been defined in Section 2(e) of the Act and includes:
- the Government of any foreign country or territory and any agency of such Government;
- 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;
- a foreign company;
- a corporation, not being a foreign company, incorporated in a foreign country or territory;
- a multi-national corporation
- 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, by one or more of the following, namely:-
- the Government of a foreign country or territory;
- the citizens of a foreign country or territory;
- corporations incorporated in a foreign country or territory;
- trusts, societies or other associations of individuals;
- Foreign company;
- a trade union in any foreign country or territory, whether or not registered in such foreign country or territory;
- a foreign trust or a foreign foundation mainly financed by a foreign country or territory;
- a society, club or other association or individuals formed or registered outside India;
- a citizen of a foreign country.
- remittances from Indians abroad i.e. Indian citizens, for the purpose of contributing to the aforesaid associations/organisations do not attract the provisions of FCRA.
- Contribution given by the non-resident foreign citizens of Indian origin through their NRE and FCNR accounts maintained in India, the provisions of FCRA will be attracted and these contributions are to be treated as “Foreign Source”.