Common FCRA Violations explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Most FCRA contraventions are breaches of ordinary duties: receiving in the wrong account, spending beyond the administrative limit, a late intimation, a missing statement. The Act punishes them under sections 33 to 37, and the compounding notifications fix amounts for the common ones. This article lists them with the duty each comes from, so that avoiding the violation means doing the duty. If a notice has already arrived, our legal dispute resolution team can map it against these rows.
It is written as per the Foreign Contribution (Regulation) Act, 2010 read with the Amendment Act, 2020, and the Foreign Contribution (Regulation) Rules, 2011 as amended by the notifications named in this article (latest consulted: S.O. 3272(E) dated 22 June 2026). The compounding amounts are from S.O. 3025(E) of 1 July 2022 as amended by S.O. 778(E) of 20 February 2023 and S.O. 3287(E) of 22 June 2026. Later amendments, notifications and Ministry of Home Affairs orders should be checked.
Section 35 (up to five years, or fine, or both) covers acceptance in contravention of the Act, a rule or an order. Section 37 (up to one year, or fine, or both) catches a failure to comply with a provision that has no separate penalty. Section 33 (up to six months) covers a knowingly false intimation or fraud in an application. The table below pairs each common violation with its duty and its compounding row. Compounding is open only before prosecution.
The violations, the duties and the amounts
| Violation | Duty it comes from | Penal section | Compounding amount (notification row) |
|---|---|---|---|
| Accepting foreign contribution without registration or prior permission | Section 11 | 35 | One lakh rupees or thirty per cent. of the contribution received or utilised, whichever is higher (row 4(a)) |
| Using it for a purpose, or in a State or Union territory, for which registration has not been granted | Section 11 with rule 9(1B) | 35 | Thirty per cent. of the amount so utilised or one lakh rupees, higher (row 4(b)) |
| Accepting foreign hospitality without permission | Section 6 | 35 | Ten thousand rupees (row 1) |
| Transferring foreign contribution to another person | Section 7 | 37 | One lakh rupees or ten per cent. of the amount transferred, higher; compoundable only once (row 2) |
| Administrative expenses beyond twenty per cent. of the contribution received in a financial year | Section 8(1)(b), rule 5 | 37 | One lakh rupees or five per cent. of the excess, higher (row 3(a)) |
| Speculative activity | Section 8(1)(a) proviso, rule 4 | 37 | Thirty per cent. of the amount invested or one lakh rupees, higher, and one hundred per cent. of the returns (row 3(b)) |
| Use for purposes other than those received for | Section 8(1)(a) | 37 | Thirty per cent. of the amount so utilised or one lakh rupees, higher (row 3(c)) |
| Receiving in an account other than the one specified in the application | Section 17 | 37 | One lakh rupees or five per cent. of the amount received in that account, higher (row 5(a)) |
| Depositing other funds in the FCRA or utilisation account | Section 17, third proviso | 37 | One lakh rupees or two per cent. of the deposit, higher (row 5(c)) |
| No intimation under section 18 | Section 18, rule 17 | 37 | One lakh rupees or five per cent. of the contribution for which intimation is not furnished, higher (row 6) |
| Accounts and records not kept | Section 19, rule 11 | 37 | One lakh rupees or five per cent. of the contribution for which they are not maintained, higher (row 7) |
| No intimation of receipt from relatives in time | Rule 6 | 35 (with sections 3 and 11) | Five per cent. of the contribution received in a financial year (row 8) |
| No intimation of a utilisation account in time | Rule 9(1)(e), (2)(e) | 37 | Ten thousand rupees per utilisation account (rows 9 and 10) |
| No intimation of changes in time | Rule 17A | 37 | Ten thousand rupees for each violation (row 11) |
| Audited statement not placed on the website in time | Rule 13(a) | 37 | Ten thousand rupees for each violation (row 12) |
| Knowingly giving a false intimation, or fraud in an application | Sections 9(c), 18; sections 11 and 12 | 33 | Not a row in the notification table |
| Dealing with a thing in breach of a prohibitory order | Section 10 | 34 | Not a row in the notification table |
Row 5(b) deals with banks and authorised persons that do not report the prescribed amount, source and manner of a remittance (one lakh rupees or three per cent., higher). The amount in every row is capped at the value of the foreign contribution received (paragraph 2 of S.O. 3025(E)). Where an offence is punishable with imprisonment only, section 41(1) does not allow compounding. See section 41.
How to avoid each group
Receipt. Receive foreign contribution only in the FCRA Account, which section 17 requires and which section 12(1A) requires an applicant to open; no other funds may be received or deposited in it. A registered person with a utilisation account intimates it in Form FC-6D within forty five days. Section 3 lists persons who cannot accept foreign contribution, and section 11 requires registration or prior permission. See section 17 and section 3.
Use. Section 8 requires the contribution to be used for the purposes for which it was received, bars speculative business, and sets the twenty per cent. limit on administrative expenses unless the Central Government gives prior approval. Rule 5 lists what counts as administrative expenses, and from 1 January 2025 the unspent part of the allowable amount may be carried forward for reasons stated in Form FC-4. Section 7 bars any transfer to another person. Rule 9(1B) ties use to the purposes and States on the certificate, and Explanation 2 to rule 9 limits use to activities in India. Our books of accounts and compliance team can map each ledger head to these limits. See section 8, rule 5 and section 7.
Records and returns. Keep a separate set of accounts and records (rule 11), file Form FC-4 within nine months of the close of the financial year, place the audited statement on the website within the same nine months, and file a NIL report if nothing was received. See rule 17 and rule 13.
Intimations. Rule 6 (more than ten lakh rupees from relatives in a financial year: Form FC-1, three months), rule 9 (utilisation accounts: forty five days) and rule 17A (changes: forty five days, effective only after final approval). See the intimation article and rule 17A.
Statements. Section 33 attaches to a false intimation or fraud in an application, and section 14(1)(a) allows cancellation where a statement in, or in relation to, the application for registration or renewal is incorrect or false.
If a violation has already happened
Compounding before prosecution is possible only for offences not punishable with imprisonment only, and not for a similar offence within three years of an earlier compounding. The application goes to the Secretary, Ministry of Home Affairs, in electronic form with a fee of rupees three thousand only under rule 21. A cancelled certificate carries a bar of three years on registration or prior permission under section 14(3). See sections 37 and 38.
Need help reviewing your position?
Reconciling the receipts, the FCRA Account and the returns is usually the quickest way to find a gap. Speak to our legal dispute resolution practice or our books of accounts and compliance team.
Key takeaways
- Most violations are breaches of ordinary duties of account, use, return and intimation; section 37 is the residual penalty.
- The compounding table has twelve serial numbers, is capped at the value of the contribution, and applies only before prosecution.
Read next
- Sections 33 and 34: false statement and breach of a prohibitory order
- Sections 35 and 36: punishment for contravention
- Section 14: cancellation of certificate
- Compounding vs adjudication of offences
Disclaimer: Based on the Foreign Contribution (Regulation) Act, 2010 as enacted, read with the Amendment Act, 2020 and the other amendments named in this article, and on the Foreign Contribution (Regulation) Rules, 2011 as amended by the notifications named (latest consulted: S.O. 3272(E) dated 22 June 2026), as consulted on 2 October 2026. No consolidated official text was available; some provisions rest on a third-party copy and are identified as such. Later amendments, notifications and Ministry of Home Affairs orders should be checked. This article is general information, not legal advice; check the official text before acting.