Govt tightens foreign funding rules for foreign funded NGOs
NEW DELHI: Eliminating any room for ambiguity in activities permitted in the country with foreign contributions, the home ministry has notified a schedule of 105 purposes from which NGOs and associations, both ones seeking fresh registration and those already registered under the Foreign Contribution Regulation Act (FCRA), must choose while declaring their purpose or purposes of registration. The Schedule of ‘purposes’ notified through the Foreign Contribution (Regulation) Amendment Rules, 2026 notified on Monday, lists the five primary categorisations — religious, cultural, economic, educational and social — as well as detailed sub-lists of ‘purposes’ approved for each of these categories. Interestingly, the list of 16 purposes categorised under the ‘religious’ cohort explicitly excludes proselytisation, while listing conduct of religious education, moral instruction, discourses and meditation retreats as valid activities by foreign-funded NGOs. NGOs, as per the amended rules, will also be required to declare the states/UTs in which they intend to undertake activities funded by foreign sources. They can specify multiple purposes as well as states and Union territories for their proposed activities, but the Rs 10,000 fee payable at the time of registration will deemed to be for just one state and one purpose. For any additional purpose or state/UT to which the non-profit seeks to expand the scope of its activities, it must pay Rs 300 extra per purpose and per state/UT. While every application for FCRA registration must specify the purpose and state-UT where the NGO intends to undertake activities, entities already registered under FCRA have been allowed one year from the date of commencement of the amended rules, to intimate to the govt, through a designated form, the purpose or purposes as well as the states or UTs for which they seek to retain their registration. In a separate notification on Monday, the MHA said associations receiving foreign donations will now face a harsh penalty for utilising foreign contributions for purposes other than for which they were received, using them for speculative activities and taking foreign contributions without valid registration or prior permission, including where they fail to submit a hard copy of their registration application to MHA. For these offences, the NGO will have to pay a penalty of Rs 1 lakh or 30% (whichever is higher) of the amount utilised/received for unauthorised purpose, invested in speculative activities, or utilised without due FCRA nod or prior permission and where no hard copy of the application for registration or prior permission is submitted within a month of the online application. The NGO utilising the contributions for speculative activists will also need to turn in 100% of the returns received.An FCRA-registered entity wanting to change the scope of its operation may apply for deletion of inclusion of a purpose or state/UT through Form 6-F. The Centre may allow or reject the same.Every FCRA certificate to be granted shall henceforth specify the purpose or purposes of registration as well as the states or UTs for which such registration is granted. In another key amendment, an NGO or association having foreign nationals, other than those of Indian origin, as its key functionaries shall not ordinarily be considered eligible for registration or prior permission. However, the govt may specify cases and circumstances in which exceptions can be made, but the foreign contribution should be received and utilised only for activities carried out in India in accordance with the association’s objectives and for stated purposes. All FCRA-registered entities will need to declare in their returns (form FC-4) their social media accounts, official website and ultimate donors in case of donor-advised funds or other intermediary remittance vehicles, apart from attaching the detailed activity report specifying the name of project, address, and utilisation of foreign funds towards the project, fresh assets and administrative expenses. The NGO will also need to declare any publications brought out by it or a key functionary. Any association conducting activities with prior permission under FCRA will need to intimate to the govt, through Form FC-3BB, that it has utilised 75% of the last instalment. The subsequent instalment will be released after field inquiry of such utilisation. The latest amendments also clarify that for the purpose of cancellation and renewal of FCRA registration, any association shall be deemed to have undertaken “reasonable activity” in its chosen field for the benefit of society if it has utilised foreign contribution of not less than Rs 10 lakh in the last two financial years for such purpose. Go to Source
