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CS Professional · CSR and Social Governance · Foreign Funding to Non-Corporate Entities

Asha Foundation holds an FCRA registration and receives foreign contribution. Its trustees propose to pass part of that contribution to Bharat Shiksha Mandal, an unregistered local trust, to run a school programme. Under the FCRA, 2010 as it stands after the 2020 amendment, what is the position?

The transfer is prohibited. Section 7 of the FCRA, 2010, as substituted in 2020, bars any registered or prior-permission holder who receives foreign contribution from transferring it to any other person, with no exception for part amounts or reporting.

  1. APermitted if the amount is below half of the contribution received
  2. BPermitted if Bharat Shiksha Mandal opens a scheduled bank account
  3. CProhibited, because a registered person who receives foreign contribution shall not transfer it to any other personCorrect
  4. DPermitted if the transfer is reported in the annual statement

Explanation

Section 7, as substituted in 2020, says no person who is registered or has obtained prior permission and who receives foreign contribution shall transfer it to any other person. It sets no percentage limit and no exception for reporting or bank accounts, so the proposed transfer is barred.

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