The Government has amended the regulatory regime governing foreign contributions with some far-reaching consequences for non-profit organisations such as the limitation on administrative expenses of NGOs, restriction on transferability of foreign contributions and suspension of registration during the pendency of an inquiry.
The Foreign Contribution (Regulation) Act, 2010 (Act) regulates the receipt and utilisation of foreign donations to ensure that such contributions do not adversely affect internal security. In recent years, the registration of various not-for-profit organisations have been cancelled for violations of the Act such as misutilisation of foreign contribution, non-submission of mandatory annual returns and diversion of foreign funds for purposes other than those declared. In this backdrop, the Government of India decided to amend the Act and notified the Foreign Contribution (Regulation) Amendment Act, 2020 (FCRA Amendment Act) on 29 September 2020 with the objective of strengthening the compliance mechanism, enhancing transparency and accountability in the receipt and utilisation of foreign contribution and facilitating genuine non-governmental organisations or associations (NGOs) working for the welfare of society.
Here, we briefly discuss some of the key changes introduced by the FCRA Amendment Act.
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