Home Office relaxes rules on foreign donations. That’s who benefits.

The Government of India has amended the rules on foreign donations to individuals and NGOs, increasing the limits and deadlines provided for filing returns.

Here’s how the changed rules work:

Indians can now receive up to Rs 10 lakh per annum from relatives residing abroad without informing the authorities, under the Foreign Contribution Amendment (Regulation) Rules, 2022 notified by the Ministry of Home Affairs. The previous limit was Rs 1 lakh.

If the amount exceeds this limit, a person will now have 90 days to inform the government instead of the previous 30 days.

The changes were made by amending Rule 6 of the Foreign Contribution (Regulation) Rules, 2011. Earlier, the rule required individuals to inform the government within 30 days if they received more than Rs 1 lakh from relatives living abroad.

The Ministry of Home Affairs has made changes in Rule 9 which deals with application for ‘registration’ or ‘prior authorisation’ under the FCRA for receipt of funds.

The amended regulation gives individuals and non-governmental organizations a 45-day period to inform the ministry about the bank accounts that will be used to absorb these funds. The previous deadline was 30 days.

The central government has also ‘skipped’ provision ‘b’ in rule 13, which requires an NGO or an individual receiving foreign funds to declare such contributions every quarter on its official website.

They will now have to follow the existing provision of publishing the audited statement of accounts on their website or any other website specified by the government within nine months of the close of a financial year beginning in April, according to the notification. The audited statement of accounts should include a statement of income and expenditure, receipt and account payable and balance sheet.

In case of change of bank account, name, address, objectives or key members of the organization receiving foreign funds, the Ministry of Interior now gives 45 days to inform, instead of 15 days earlier.

The Ministry of Home Affairs tightened the FCRA rules in November 2020 by clarifying that NGOs that may not be directly affiliated with a political party but engage in political actions such as gangs, strikes or road blockades will be considered political in nature if they engage in active politics or party politics.

By law, all NGOs receiving funds must register under the FCRA.

More complex crimes

In a separate notification, the Ministry of Home Affairs made five more offenses under the FCRA ‘compoundable’ by making 12 such offenses compound rather than directly prosecuting the organizations or individuals.

Cumulative offenses allow settlement by payment of a fine.

Already complex FCRA violations include failure to disclose intimate information regarding receipt of foreign funds, opening bank accounts, failure to post information on a website, and more.

Previously, the offenses of accepting hospitality from a foreigner without informing, disbursing foreign funds for administrative use above the permissible limit, receiving money in an account other than that designated for foreign funds and four others were complex.

The penalty amount ranges from Rs 10,000 to Rs 1 lakh or 5% of the foreign funds, whichever is higher.

– With PTI inputs

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