Penalties Under FCRA 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.
Chapter VIII of the Act lists the offences and penalties: sections 33 to 41. They run from a false intimation (up to six months) to accepting foreign contribution in contravention of the Act (up to five years), with a residual penalty, a bar after a second conviction, liability of those in charge of a company, a sanction requirement and a compounding route. This article is a guide across all nine sections; if a notice has reached you, our legal dispute resolution team can map the section alleged against the facts.
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 Amendment Act, 2020 did not change sections 33 to 41. Later amendments, notifications and Ministry of Home Affairs orders should be checked.
Section 33: six months, or fine, or both. Section 34: three years, or fine, or both, plus an additional fine. Section 35: five years, or fine, or both. Section 37: one year, or fine, or both, where no separate penalty exists. Section 38: no foreign contribution for five years after a second conviction. Section 41 lets an offence that is not punishable with imprisonment only be compounded before prosecution, on the sums in the Central Government's notifications.
The penalty sections at a glance
| Section | Conduct | Punishment as printed |
|---|---|---|
| 33 | Knowingly giving a false intimation under section 9(c) or section 18, or seeking prior permission or registration by fraud, false representation or concealment of material fact | Imprisonment up to six months, or fine, or both, on conviction by a court |
| 34 | Dealing with an article, currency or security in breach of a prohibitory order served under section 10 | Imprisonment up to three years, or fine, or both; the court may also impose an additional fine up to the market value or amount, or such part as it deems fit |
| 35 | Accepting, or assisting any person, political party or organisation in accepting, foreign contribution or currency or security from a foreign source in contravention of the Act, a rule or an order | Imprisonment up to five years, or fine, or both |
| 36 | A convicted person's act or omission made an article, currency or security liable to confiscation, and it is not available for confiscation | Further fine up to five times its value or one thousand rupees, whichever is more, in addition to any other fine |
| 37 | Failure to comply with a provision for which no separate penalty is provided | Imprisonment up to one year, or fine, or both |
| 38 | A second conviction under section 35 or 37 relating to acceptance or utilisation of foreign contribution | No acceptance of foreign contribution for five years from the date of the subsequent conviction |
Section 33(a) refers to "sub-section (c) of section 9"; section 9 has clauses, and section 48(2)(g) calls it "clause (c) of section 9". It is a slip in the Act's own text. The detail of each pair is in the articles on sections 33 and 34, sections 35 and 36 and sections 37 and 38.
Section 35 against section 37
Section 35 is about acceptance of foreign contribution, or currency or security from a foreign source, in contravention of the Act, a rule or an order. Section 37 applies only where "no separate penalty has been provided in this Act". The compounding notifications list failures on intimation under section 18, accounts under section 19 and the use of the FCRA Account under section 37.
Section 39: offences by companies and associations
Where an offence is committed by a company, the company and every person in charge of, and responsible to, it for the conduct of its business at the time are deemed guilty, unless he proves the offence was committed without his knowledge or that he exercised all due diligence. Directors, managers, secretaries and other officers are also reached where consent, connivance or neglect is proved. For section 39, "company" includes a firm, society, trade union or other association of individuals, and "director" includes a member of the governing body of a society. See sections 39 and 40.
Section 40: previous sanction
No court may take cognizance of an offence under the Act except with the previous sanction of the Central Government or an officer it authorises. The section does not describe the form of sanction.
Section 41: compounding
Under section 41(1) any offence punishable under the Act, other than one punishable with imprisonment only, may, before the institution of any prosecution, be compounded by the officers and for the sums the Central Government specifies by notification. Section 41(2) excludes a similar offence within three years of an earlier compounding; an offence after three years is deemed a first offence. Under section 41(5) no prosecution follows an offence compounded before prosecution. Under rule 21, as substituted by G.S.R. 695(E) of 10 November 2020, the application goes to the Secretary, Ministry of Home Affairs, in electronic form, with a fee of rupees three thousand only. See rules 20 and 21 and section 41.
The compounding notifications in outline
The table is 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. The officer named is the Director, or as the case may be, the Deputy Secretary in-charge of the section responsible for the administration of the Act. "Higher" means whichever is higher.
| Sr. | Offence | Amount |
|---|---|---|
| 1 | Section 35, hospitality in breach of section 6 | Ten thousand rupees |
| 2 | Section 37, transfer in breach of section 7 (compoundable only once) | One lakh rupees or ten per cent. of the amount transferred, higher |
| 3 | Section 37, section 8: administrative expenses beyond twenty per cent.; speculative activity; other purposes | One lakh rupees or five per cent. of the excess; thirty per cent. of the amount invested or one lakh rupees, higher, plus all returns; thirty per cent. of the amount used or one lakh rupees, higher |
| 4 | Section 35, section 11: accepting or utilising in contravention; use for a purpose or State not registered | One lakh rupees or thirty per cent., higher; thirty per cent. of the amount used or one lakh rupees, higher |
| 5 | Section 37 with section 17: other account, bank non-reporting, other funds deposited | One lakh rupees or five, three or two per cent., higher |
| 6 and 7 | Section 37: no intimation under section 18; accounts and records not kept under section 19 | One lakh rupees or five per cent. of the contribution concerned, higher |
| 8 | No intimation of receipt in time, with rule 6 | Five per cent. of the contribution received in a financial year |
| 9 to 12 | Account intimation (rule 9), change intimation (rule 17A), website statement (rule 13) | Ten thousand rupees per account or per violation |
The amount computed is capped at the value of the foreign contribution received (paragraph 2 of S.O. 3025(E)). The full rows are in the article on section 41; the difference between settling and being adjudicated is in compounding vs adjudication.
Need help with a notice or a proposal to compound?
Whether a default sits under section 35 or section 37, and whether a proposal to compound is open, turns on dates and figures. Speak to our legal dispute resolution practice or book a short legal consultation with the notice and the account statements.
Key takeaways
- Maximum imprisonment is six months, three years, five years and one year under sections 33, 34, 35 and 37; section 38 bars acceptance for five years after a second conviction.
- Section 41 allows compounding before prosecution of offences not punishable with imprisonment only; a similar offence within three years cannot be compounded.
Read next
- Sections 33 and 34: false statement and breach of a prohibitory order
- Sections 35 and 36: punishment for contravention and additional fine
- Section 41: compounding of offences
- Section 31: appeal
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.