Snehal Sansthan a non-profit organization registered under Section 8 of the Companies Act, 2013 is enlisted under the Foreign Contribution (Regulation) Act, 2010 (FCRA) to procure foreign money. The organization is activ

The guidelines for Foreign Funding are as under: As per Section 17 of Foreign (Contribution) Regulation Act, 2010, NGOs have to open and maintain bank accounts, which will exclusively deal with the receipt and utilization of foreign contributions. A separate set of accounts and records must be maintained, exclusively for these transactions. The FCRA also mandates that foreign contributions must be utilized only for the purpose for which they were received. Under Section 7 of Foreign (Contribution) Regulation Act, 2010, the transfer of contributions is not allowed. A person or entity is prohibited from transferring contributions to any other person, unless such transferee is authorized by the government to receive foreign contributions. The Due Diligence & Reporting Requirements are as under: The most important reporting requirement under FCRA is the submission of annual returns. All NGOs are required to submit their annual returns online with scanned copies of income and expenditure statement, receipt and payment account and balance sheet within nine months from the closure of the previous financial year. This return has to include all the details of the contributions received, namely: Source and manner in which it is received; Purpose for which it was received; and, Manner of usage of the contributions. It is necessary for the entities who receive foreign funding to review the updated FCRA norms and meet their compliance obligations meticulously to avoid any regulatory actions. As once an entity appears under the government scanner for non-compliance, such organizations may face all manner of restrictions and regulatory obstacles.