Explain FCRA Due diligence.

The Foreign Contribution (Regulations) Act, 2010, the Foreign Contribution (Regulation) Rules, 2011 (FCRA Rules, 2011), and Foreign Contribution (Regulation) Amendment Rules, 2015 (FCRA Amendment Rules, 2015) were respectively enacted to regulate the inflow of foreign funds received by Non-Governmental Organizations (NGOs). The FCRA, 2010 replaces the erstwhile Foreign Contribution (Regulation) Act, 1976. The FCRA legislation state that an organization cannot receive funding from a foreign source, unless it is registered under the Foreign Currency (Regulations) Act, 2010 or has obtained special government approval for a specific project. Also, the registered NGOs need to comply with various post-registration requirements, as detailed in the provisions of the Act and its rules of enforcement. NGOs in India are categorized under three legal categories: society, trust, and a limited company. These may be founded for a specific cultural, economic, educational, religious, or social purpose. These organizations are heavily regulated by respective state and government agencies. The Income Tax Department (IT Department) and Ministry of Home Affairs regulate registration and require all NGOs to file annual tax returns and submit audited account statements to their respective agencies. All types of NGOs are treated equally under the Income Tax Act, 1961. The most important reporting requirement under the FCRA is the submission of annual returns. All NGOs are required to submit their annual returns to the Ministry of Home Affairs (MHA) within nine months from the closure of the previous financial year.