Delhi/Hyderabad, june 24 (Maxim News): The Centre has tightened the rules related to NGOs accepting foreign donations. To this end, a gazette notification was issued on Monday amending several provisions of the ‘Foreign Contributions Control Act, 2011’ (FCRA). According to these, NGOs with foreigners in key positions such as directors, partners, trustees, etc. will not be recognized or allowed to accept foreign donations.
Only organizations that are specifically permitted by the government will be exempted from this provision. NGOs registering for foreign donations will have to clearly state the purpose for which they are seeking donations and in which states and union territories in the country their activities will be carried out. A schedule has been included in this notification categorizing the activities of NGOs into religious, cultural, educational and social service sectors.
NGOs will have to specify which sector applies to them. Religious activities include construction, renovation, and maintenance of places of worship, spiritual music, teachings, sermons, meditation, registration of devotional traditions, and preservation of indigenous beliefs. None of these can be done with the aim of proselytizing. NGOs registered before 2026 must inform the government about the objectives of their activities and the areas in which they operate within a year. Further, if they want to increase their objectives and areas in which they operate, they must pay an additional fee of Rs. 300 to the government.
NGOs must submit records showing that at least Rs. 10 lakh of foreign donations received in the last two financial years were spent in a specified area and for a specified purpose. Only then will the NGO license be renewed. Otherwise, the license will be canceled. The Center has brought this provision to check the trend of many NGOs continuing to hold licenses even though they have become inactive. NGOs that receive foreign donations with prior permission for a ‘specific purpose’ will not be released in the second tranche unless they spend at least 75 percent of the funds released under the first tranche. The government will conduct a field investigation into the expenditure of the funds. NGOs that receive foreign donations must submit details of their social media accounts to the government. If the funds are received through indirect channels instead of direct, the real donor must be clarified. In addition to financial details, details of activities should also be included in the filing of IT returns. NGOs should not broadcast any kind of news. Whatever books or articles they publish, they should inform the government about them.
Penalties for violation of rules
The Centre has also revised the penalties imposed on NGOs for misusing foreign donations. For this, the Union Home Ministry has issued another gazette notification. According to this, if more than 20 percent of the foreign donations are spent on administrative expenses, a penalty of Rs. 1 lakh or 5 percent of the expenditure exceeding the limit (whichever is higher) will be imposed. If foreign donations are invested in things like the share market, a penalty of Rs. 1 lakh or 30 percent of the investment (whichever is higher) will be imposed. The government will seize 100 percent of the profits made from that investment. If foreign donations are used for purposes other than the specified objective, a penalty of 30 percent of that amount or Rs. 1 lakh (whichever is higher) will be collected. The same level of penalty will apply even if the said donations are used in a state or union territory where the NGO is not registered. (Maxim News)
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