Skip to content

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

Receipt, Utilisation and Administrative Expenses under FCRA 2010

Updated 11 October 2026 · Fact-checked

A registered person must receive foreign contribution only in a designated FCRA Account at the specified State Bank of India branch in New Delhi (section 17). They must use it for the stated purpose, not for speculative business, and not spend more than 20% of a year's receipts on administrative expenses without Central Government approval (section 8).

Understand Receipt, Utilisation and Administrative Expenses

Under the Foreign Contribution (Regulation) Act, 2010, getting a registration certificate or prior permission is only the start. Section 17 and section 8 control how the money comes in and how it is spent. Examiners like this topic because the rules are short and precise.

Receipt (section 17). Every person granted a certificate or prior permission under section 12 must receive foreign contribution only in an account designated as the FCRA Account. This account is opened in the branch of the State Bank of India at New Delhi that the Central Government specifies by notification. An applicant must also open this account and give its details in the application (section 12(1A)).

Two further kinds of account are allowed. First, the person may open another FCRA Account in any scheduled bank of choice, to keep or use the money received from the SBI New Delhi account. Second, the person may open one or more accounts in one or more scheduled banks, to which money is transferred for utilisation. Whatever the account, no funds other than foreign contribution may be received or deposited in it.

The bank also has a duty. The specified SBI branch, the scheduled bank branch where the account is held, or the authorised person in foreign exchange must report the prescribed amount of foreign remittance, its source and manner of receipt, and other particulars to the specified authority, in the prescribed form and manner (section 17(2)).

Utilisation (section 8). The person must use the contribution for the purpose for which it was received. The contribution, or any income arising from it, must not be used for speculative business. The Central Government specifies by rules which activities count as speculative business. Administrative expenses are capped at twenty per cent of the contribution received in a financial year. Anything above that needs prior approval of the Central Government. The limit was earlier fifty per cent and was reduced to twenty per cent with effect from 29-9-2020. The Government may prescribe which elements form administrative expenses and how they are calculated.

Key rules to remember

Where to receive foreign contribution
Receipt only in the "FCRA Account" at the specified SBI branch, New Delhi (section 17(1))
Applies to every person granted a certificate or prior permission under section 12.
Other accounts allowed
Another FCRA Account in any scheduled bank + one or more utilisation accounts in scheduled banks
Funds come only from the SBI New Delhi FCRA Account or the other FCRA Account. No funds other than foreign contribution may be received or deposited.
Administrative expense limit
Maximum administrative expenses = 20% × foreign contribution received in the financial year (section 8(1)(b))
More than 20% needs prior approval of the Central Government.
Purpose and speculation rule
Use for the purpose received; no use of contribution or its income for speculative business (section 8(1)(a))
Activities treated as speculative are specified by rules.
Bank reporting
Bank or authorised person reports amount, source and manner of remittance (section 17(2))
Done to the authority specified, in the prescribed form and manner.
Rule-making power
Section 48: Central Government may make rules by notification
Covers speculative business, elements of administrative expenses, and bank reporting under section 17(2).

How to solve Receipt, Utilisation and Administrative Expenses questions

Use this method for any question on receipt or utilisation of foreign contribution under the FCRA.

  1. 1Check whether the person holds a certificate or prior permission under section 12. Sections 17 and 8 apply to such persons.
  2. 2Identify what is being asked: receipt of money, holding or transfer of money, or spending of money.
  3. 3For receipt, test whether it went into the FCRA Account at the specified SBI New Delhi branch. For other accounts, check that the money was only transferred from that account or another FCRA Account.
  4. 4Check that no non-foreign-contribution funds were put into any of these accounts.
  5. 5For spending, check the purpose: is it the purpose for which the money was received, and is it free of speculative business?
  6. 6For administrative expenses, compute 20% of the contribution received in that financial year and compare it with the expenses claimed. If it is higher, ask whether prior Central Government approval was taken.
  7. 7Write the provision, apply it to the facts, and end with a clear conclusion, citing section 17 or section 8.

Quickest way: Two-section checklist

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

  1. Receipt problem: write section 17(1), then check account type and any mixing of funds.
  2. Spending problem: write section 8(1), then check purpose, speculation and the 20% cap.
  3. Do the 20% calculation on the year's receipts only, and state whether approval is needed.
  4. Conclude in one line: compliant, or breach with the missing step.

Common mistakes in Receipt, Utilisation and Administrative Expenses

  • Stating the administrative expense limit as 50%.

    Older books and notes still show the earlier limit.

    Fix: Write twenty per cent. It was substituted for fifty per cent with effect from 29-9-2020.

  • Saying foreign contribution can be received directly in any scheduled bank account.

    Students mix up the receipt account with the utilisation accounts.

    Fix: Receipt is only in the FCRA Account at the specified SBI branch, New Delhi. Other scheduled bank accounts are for keeping or utilising money transferred from it.

  • Allowing local funds or donations to be deposited in the FCRA Account.

    Students think one account is more convenient.

    Fix: Remember the third proviso to section 17(1): no funds other than foreign contribution may be received or deposited in any such account.

  • Applying the 20% cap to total income or the total budget.

    The wording about 'such contribution' is read loosely.

    Fix: The cap is on the contribution received in a financial year, not on total funds.

  • Saying administrative expenses above 20% are absolutely banned.

    Students overlook the proviso.

    Fix: They may be incurred with prior approval of the Central Government.

  • Ignoring the speculative business bar on income from the contribution.

    Students focus only on the principal amount.

    Fix: State that both the contribution and any income arising from it must not be used for speculative business.

Worked examples

Example 1

Hope Trust, an NGO in Pune with a section 12 registration certificate, received foreign contribution of ₹50,00,000 in a financial year. It spent ₹8,00,000 on administrative expenses with no approval from the Central Government. Has it complied with section 8?

Show the solution
  1. Hope Trust is a registered person that has received foreign contribution, so section 8(1) applies.
  2. The limit on administrative expenses is 20% of the contribution received in the financial year.
  3. 20% of ₹50,00,000 = ₹10,00,000.
  4. Actual administrative expenses are ₹8,00,000, which is below ₹10,00,000.
  5. So no prior approval of the Central Government is needed.

Answer: Yes. Administrative expenses of ₹8,00,000 are within the limit of ₹10,00,000 under section 8(1)(b), so Hope Trust has complied.

Example 2

Asha Foundation, holding a certificate under section 12, wants to receive a foreign donation directly in its savings account with a local scheduled bank, which also holds its domestic donations. Advise it.

Show the solution
  1. Section 17(1) says a certificate holder must receive foreign contribution only in an account designated as FCRA Account at the specified SBI branch, New Delhi.
  2. A local savings account is not that account, so receipt there directly is not permitted.
  3. Asha may open another FCRA Account in a scheduled bank of its choice, but only to keep or use contribution received from the SBI New Delhi FCRA Account.
  4. It may also open utilisation accounts in scheduled banks and transfer money to them from the FCRA Account.
  5. No funds other than foreign contribution may be deposited in any such account, so domestic donations cannot be mixed in.

Answer: Asha Foundation cannot receive the foreign donation directly in its local account. It must be received in the FCRA Account at the specified SBI branch in New Delhi, and it may then transfer funds to other FCRA or utilisation accounts. Domestic donations must not be deposited in these accounts.

Exam tips

  • Quote section 17 for accounts and section 8 for utilisation and the 20% cap. Examiners reward the right section.
  • For numerical questions, show the 20% calculation line by line, then conclude on approval.
  • Use the order: provision, application to facts, conclusion.
  • Mention the three account types under section 17 in a short list. It is an easy way to score.
  • Do not confuse this topic with the prohibition on acceptance or the registration process. Keep your answer within what is asked.

Practice questions from Law relating to Foreign Contribution Regulation

Receipt, Utilisation and Administrative Expenses: frequently asked questions

What is the limit on administrative expenses under FCRA?

A registered person must not spend more than twenty per cent of the foreign contribution received in a financial year on administrative expenses. A higher amount needs prior approval of the Central Government (section 8(1)(b)).

Where must foreign contribution be received under FCRA?

It must be received only in an FCRA Account at the specified State Bank of India branch in New Delhi. Another FCRA Account and utilisation accounts can be opened in scheduled banks for keeping or using the money transferred from it (section 17).

Can FCRA accounts hold other funds?

No. The Act says no funds other than foreign contribution may be received or deposited in any such account.

Can foreign contribution be invested in speculative business?

No. The contribution and any income from it must not be used for speculative business. The Central Government specifies by rules which activities are speculative.

Do banks have any reporting duty?

Yes. The specified SBI branch, the scheduled bank branch holding the account, or the authorised person in foreign exchange must report the prescribed amount of remittance, its source and manner of receipt, and other particulars to the specified authority (section 17(2)).