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CS Professional · CSR and Social Governance · Contribution of Non-Corporate Entities in Social Governance

Sahyog Welfare Society, an NGO, plans to accept contributions from a donor abroad for its education programme. Which statement correctly describes the compliance position under Indian law on foreign contribution?

The society must hold FCRA registration or prior permission, receive foreign contributions only through its designated FCRA account, and file annual returns on receipts and utilisation. Education as a purpose does not exempt it, and RBI approval alone or an ordinary account is not sufficient.

  1. AIt must be registered or hold prior permission under the foreign contribution law, receive funds only in the designated FCRA bank account, and file annual returnsCorrect
  2. BIt may receive foreign funds in any bank account without registration
  3. CIt needs only RBI approval for each contribution
  4. DIt is free of any reporting if funds are used for education

Explanation

Under the Foreign Contribution (Regulation) Act, an NGO must have FCRA registration or prior permission, receive contributions in the designated account and file returns of receipts and utilisation. Purpose such as education gives no exemption.

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