How to File Annual Returns Under FCRA (Form FC-4)

3.1 Legal Framework

Section 19 of the FCRA, 2010, mandates that all FCRA-registered organizations maintain detailed accounts of foreign contributions and file annual returns using Form FC-4, as per Rule 17 of the FCRR, 2011. This requirement ensures transparency in the receipt and utilization of foreign funds, allowing the MHA to monitor compliance with FCRA objectives.

3.2 Who Must File

Every organization with FCRA registration or prior permission must file Form FC-4 annually, regardless of whether foreign contributions were received. A ”Nil” return is mandatory if no funds were received, ensuring continuous compliance.

Example: ”Health for Humanity,” an FCRA-registered NGO based in Delhi, received ￿50 lakhs in foreign contributions in FY 2024-25 for healthcare projects. It must file Form FC-4 by December 31, 2025, to report these funds. Conversely, ”Bright Future NGO,” which received no contributions, must file a ”Nil” return for the same period.

3.3 Format of Form FC-4

Form FC-4 is a comprehensive document divided into six parts, each capturing specific aspects of foreign contribution management:

• Part I: General organization details, including name, registration number, and FCRA registration details.
• Part II: Details of foreign contributions received, including donor names, amounts, and dates.
• Part III: Utilization details, specifying how funds were spent on projects and programs.
• Part IV: Balance of unutilized contributions at the end of the financial year.
• Part V: Administrative expenses incurred from foreign contributions, capped at 20% as per the FCRA Amendment Act, 2020.
• Part VI: Chartered Accountant’s certificate verifying the accuracy of the reported figures.

Required Documents:

• Audited Balance Sheet for the financial year.
• Income and Expenditure Statement.
• Receipts and Payments Account, specifically for the FCRA bank account.
• Chartered Accountant’s certificate attesting to the correctness of the financial statements.

3.4 Due Date 

Form FC-4 must be filed by December 31st for the previous financial year (e.g., FY 2024-25 returns are due by December 31, 2025). Timely filing is critical to avoid penalties and maintain active FCRA status.

3.5 Penalties

Non-compliance with Form FC-4 filing requirements attracts severe penalties under the FCRA, 2010:

• Section 37: A penalty of 1,00,000 or 5% of the foreign contributions received, whichever is higher, for failing to file or filing incorrect returns.

• Section 271K: An additional penalty of 10,000 per day for continued default, significantly escalating costs for delayed compliance.

Example: ”Health for Humanity” files Form FC-4 late on January 15, 2026, for FY 2024-25, incurring a penalty of ￿1,00,000 or 5% of ￿50 lakhs (￿2.5 lakhs), whichever is higher, plus ￿10,000 per day for 15 days (￿1.5 lakhs), totaling ￿4 lakhs in penalties.

3.6 Filing Process

The filing process is conducted online via the FCRA portal:

1. Log in to the FCRA portal using the organization’s credentials.
2. Select "File Annual Return" from the services menu and choose Form FC-4.
3. Enter details of foreign contributions received, utilized, and remaining, ensuring alignment with audited financials.
4. Upload the required documents, including audited statements and the CA certificate.
5. Submit the form and pay any applicable penalties for late filing.

3.7 Pros and Cons

Pros:

– Ensures transparency in the use of foreign funds, building donor trust.
– Maintains active FCRA registration, avoiding suspension.
– Facilitates MHA oversight, aligning with national regulations.

Cons:

– Time-consuming process requiring meticulous record-keeping.
– Necessitates professional assistance from a Chartered Accountant.
– Heavy penalties for delays or inaccuracies, increasing financial risk.

Table 2: Form FC-4 Structure

3.8 Recent Updates (2025)

The FCRA Amendment Rules 2024, effective January 1, 2025, introduced provisions allowing NGOs to carry forward unspent administrative expenses to the next financial year, provided detailed justifications are included in Form FC-4. This change offers greater financial flexibility but requires additional documentation to comply (FCRA Amendment Rules 2024 Key Changes).