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Economic, Commercial and Intellectual Property Laws · Law relating to Foreign Contribution Regulation

Prohibition on Acceptance of Foreign Contribution under FCRA 2010

Updated 11 October 2026 · Fact-checked

Section 3 of the FCRA, 2010 bars certain persons from accepting foreign contribution: election candidates, media persons, judges, public servants, legislators, political parties and similar bodies. Section 7 bars a registered or permitted person from transferring foreign contribution to any other person. To answer, state the provision, apply it to the facts, then conclude.

Understand Prohibition on Acceptance of Foreign Contribution

Foreign contribution is money or help from a foreign source. The FCRA, 2010 controls it so that outside money does not shape politics, the media or public office. The Act does this in two ways. It bans some persons outright from accepting it. It also limits what even permitted persons can do with it.

Section 3(1) lists the persons who cannot accept foreign contribution:

  • a candidate for election
  • a correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper
  • a public servant, Judge, Government servant or employee of any corporation or other body controlled or owned by the Government (clause (c), as substituted in 2020)
  • a member of any Legislature
  • a political party or its office-bearer
  • an organisation of a political nature specified by the Central Government under section 5(1)
  • an association or company producing or broadcasting audio news, audio visual news or current affairs programmes through electronic or other mass communication modes
  • a correspondent, columnist, cartoonist, editor or owner of such an association or company

The ban also covers indirect routes. Under section 3(2)(a), no person resident in India, and no Indian citizen resident outside India, may accept foreign contribution or acquire foreign currency on behalf of a political party or any of these persons. Section 3(2)(b) and (c) stop a person from handing over such currency to someone he knows, or has reasonable cause to believe, will pass it on to them.

Section 3(3) covers persons or classes the Central Government has notified under section 9. A person receiving foreign currency on their behalf must not deliver it to anyone other than the person for whom it was received. The same applies if he knows or has reasonable cause to believe that the recipient will pass it to such a person.

Now the second control. Section 7 says a person who is registered or has prior permission under the Act, and who receives foreign contribution, shall not transfer it to any other person. This is the answer to the common question whether an NGO can pass its foreign contribution to another NGO. As the section is worded, it cannot. This is the version in force since 29 September 2020.

Section 9 lets the Central Government prohibit other persons or organisations, not named in section 3, from accepting foreign contribution. It can do so only if satisfied that acceptance is likely to prejudicially affect one of the listed interests, such as sovereignty and integrity of India or public interest. Section 38 adds a penalty ban. A person convicted again of an offence under section 35 or 37 relating to acceptance or utilisation of foreign contribution cannot accept any for five years from the date of the later conviction.

Key rules to remember

Section 3(1): who cannot accept
Candidate | newspaper personnel | public servant, Judge, Government servant, employee of Government-owned or controlled body | Legislature member | political party and office-bearer | political-nature organisation | audio or audio visual news or current affairs broadcaster and its key persons
Memorise clause by clause. Clauses (a) to (h) form the answer to the most common question.
Section 3(2): indirect acceptance
No acceptance, or acquisition of currency from a foreign source, on behalf of a political party or a section 3(1) person
Applies to a person resident in India and to an Indian citizen resident outside India.
Section 7: no transfer
Registered or permitted person who receives foreign contribution shall not transfer it to any other person
Both conditions apply: certificate or prior permission, and receipt of foreign contribution. Substituted w.e.f. 29-9-2020.
Section 9: further prohibition
Central Government may prohibit persons not in section 3, but only if satisfied of likely prejudice to a listed interest
Listed interests: sovereignty and integrity, public interest, fairness of elections, friendly relations with foreign States, communal and social harmony.
Section 38: repeat offenders
Second conviction under section 35 or 37 (acceptance or utilisation) → no acceptance for 5 years from the date of subsequent conviction
The five years run from the later conviction, not the first.

How to solve Prohibition on Acceptance of Foreign Contribution questions

Use this method for any question on who may accept foreign contribution or whether it can be passed on.

  1. 1Identify the act in the facts: is someone accepting, receiving on behalf of another, delivering, or transferring foreign contribution?
  2. 2Identify the person's status: candidate, journalist, judge, public servant, legislator, political party, news broadcaster, or a registered or permitted person.
  3. 3Match the status to the correct clause of section 3(1). Quote the clause.
  4. 4If the person is only an agent or conduit, check section 3(2) or 3(3) for indirect acceptance or delivery.
  5. 5If the person holds a certificate or prior permission and passes the money on, apply section 7.
  6. 6Check for a section 9 order or a repeat conviction under section 38 if the facts mention them.
  7. 7Write the conclusion in one clear line: prohibited or not prohibited, with the section.

Quickest way: Status first, then act

When to use it: When time is short and the question is a short fact-based problem.

  1. Underline the person's status and what he did with the money.
  2. Decide: is the status in section 3(1)? If yes, acceptance is barred.
  3. If he is a middleman, test section 3(2).
  4. If he is a registered NGO passing money on, cite section 7.
  5. Write: provision, one line of application, conclusion.

Common mistakes in Prohibition on Acceptance of Foreign Contribution

  • Leaving out clauses of section 3(1), especially audio news broadcasters and their key persons.

    Students remember only candidates, judges and political parties.

    Fix: Learn all eight clauses (a) to (h) as a list and write them in order.

  • Saying an NGO may transfer foreign contribution to another NGO if both are registered.

    Students recall the old position or assume the second NGO's registration cures it.

    Fix: Section 7 now bars transfer to any other person by a registered or permitted person. State that plainly.

  • Treating the section 3 ban as covering only direct receipt.

    Section 3(2) and (3) are skipped.

    Fix: Check whether the person accepted on behalf of a barred person or delivered currency to one.

  • Confusing section 3 with section 9.

    Both prohibit acceptance.

    Fix: Section 3 bans listed persons by the Act itself. Section 9 is a power of the Central Government to bar others, on stated grounds.

  • Mixing up section 6 with section 3.

    Both mention judges, legislators and government employees.

    Fix: Section 6 deals with foreign hospitality during a visit abroad, which needs prior permission. Section 3 deals with foreign contribution.

  • Counting the five years under section 38 from the first conviction.

    Students read only the words 'convicted'.

    Fix: The period runs from the date of the subsequent conviction.

Worked examples

Example 1

Rajesh is the editor of a registered newspaper in Pune. A foreign foundation offers him ₹5,00,000 for his publication. Can he accept it? Answer with reasons.

Show the solution
  1. Provision: section 3(1)(b) bars any correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper from accepting foreign contribution.
  2. Facts: Rajesh is an editor of a registered newspaper and the offer is from a foreign foundation, which is a foreign source.
  3. Analysis: his status falls within clause (b), so the ban applies whatever the purpose of the money.

Answer: Rajesh cannot accept the ₹5,00,000. Section 3(1)(b) of the FCRA, 2010 prohibits an editor of a registered newspaper from accepting foreign contribution.

Example 2

Sahayog Trust holds an FCRA registration and has received foreign contribution for a health project. It wants to give part of it to Seva Samiti, another registered NGO, to run a camp. Advise.

Show the solution
  1. Provision: section 7 says that no person who is registered or has prior permission under the Act, and receives foreign contribution, shall transfer it to any other person.
  2. Facts: Sahayog Trust is registered and has received foreign contribution. It proposes to transfer part of it to Seva Samiti.
  3. Analysis: section 7 does not carve out an exception for another registered NGO. The word used is 'any other person'.
  4. Section 17 allows the trust to move money only between its own FCRA accounts and to its own utilisation accounts in scheduled banks, not to another person.

Answer: Sahayog Trust cannot transfer the foreign contribution to Seva Samiti. Section 7 of the FCRA, 2010 prohibits it, even though Seva Samiti is registered. The trust may use the funds itself, through its own accounts permitted under section 17.

Exam tips

  • Write section 3(1) as a numbered or bulleted list. Examiners look for each category.
  • In case problems, cite the clause, for example section 3(1)(c) or section 3(1)(e), not just section 3.
  • For transfer questions, name section 7 and state both conditions: registered or permitted, and received foreign contribution.
  • Distinguish contribution (sections 3, 7) from hospitality (section 6) in one line if the facts mix them.
  • Always end with a clear conclusion in one sentence.

Practice questions from Law relating to Foreign Contribution Regulation

Prohibition on Acceptance of Foreign Contribution in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Prohibition on Acceptance of Foreign Contribution: frequently asked questions

Who is prohibited from accepting foreign contribution under FCRA?

Section 3(1) lists them. They include election candidates, newspaper editors and publishers, public servants, Judges, Government servants, legislators, political parties and office-bearers, political-nature organisations, and audio or audio visual news broadcasters and their key persons.

Can an NGO transfer foreign contribution to another NGO?

No. Section 7 bars a person who is registered or has prior permission, and who receives foreign contribution, from transferring it to any other person. This is the position since the 2020 amendment.

Can the government add more persons to the prohibited list?

Yes, under section 9 the Central Government can prohibit a person or organisation not named in section 3. It must be satisfied that acceptance is likely to prejudicially affect interests such as sovereignty and integrity of India or public interest.

What does section 38 say?

A person convicted again of an offence under section 35 or 37 relating to acceptance or utilisation of foreign contribution cannot accept any foreign contribution for five years from the date of the subsequent conviction.