Rules 14 and 14A 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.
Rule 14 says how much of the unutilised foreign contribution may be spent while a certificate is suspended: up to twenty-five per cent., with prior approval, and the remaining seventy-five per cent. only after the suspension is revoked. Rule 14A, inserted by S.O. 3272(E) of 22 June 2026, deems an association to have undertaken "reasonable activity" for cancellation and renewal if it has utilised foreign contribution of not less than ten lakh rupees in the last two financial years.
This article reads rule 14 as per the Rules as amended by the notifications named in this article (none held amends it; the text is that of the third-party consolidation of 17 September 2019, checked against the Rules as notified on 29 April 2011) and rule 14A from S.O. 3272(E) dated 22 June 2026, the latest consulted. Later amendments should be checked. If your certificate is suspended or you face a cancellation notice, a legal consultation is the place to start.
During suspension under section 13(1), up to twenty-five per cent. of the unutilised amount may be spent, with the prior approval of the Central Government, for the declared aims and objects; the remaining seventy-five per cent. only after revocation of the suspension (rule 14). For cancellation under section 14 and renewal under section 16, an association is deemed to have undertaken reasonable activity if it has utilised not less than ten lakh rupees of foreign contribution in the last two financial years (rule 14A).
Rule 14: funds during suspension
Rule 14 is headed "Extent of amount that can be utilised in case of suspension of the certificate of registration". It begins "The unspent amount that can be utilised in case of suspension of a certificate of registration may be as under -".
| Clause | Provision |
|---|---|
| (a) | In case the certificate is suspended under sub-section (1) of section 13 of the Act, up to twenty-five per cent. of the unutilised amount may be spent, with the prior approval of the Central Government, for the declared aims and objects for which the foreign contribution was received |
| (b) | The remaining seventy-five per cent. of the unutilised foreign contribution shall be utilised only after revocation of suspension of the certificate of registration |
Slip to note. Clause (a) of both the consolidation consulted and the 2011 OCR reads "is suspend under sub-section (1) of section 13". The sense is "is suspended".
How rule 14 fits with section 13
Section 13(2)(b) of the Act requires a person whose certificate is suspended to "utilise, in the prescribed manner, the foreign contribution in his custody with the prior approval of the Central Government". Section 48(2)(m) lists the manner of utilising as a rule-making head. Rule 14 is the rule that deals with the extent of the amount; see the article on section 13. Section 13(2)(a) separately bars receipt of foreign contribution during suspension unless the Government, on application, allows it.
Points on the wording:
- The base is the "unutilised amount". The twenty-five per cent. is of the unutilised amount, not of the amount received.
- Prior approval. Spending under clause (a) is "with the prior approval of the Central Government".
- Purpose. "For the declared aims and objects for which the foreign contribution was received".
- After revocation. Clause (b) says the rest "shall be utilised only after revocation of suspension". The rules held do not say what happens to the remainder if the certificate is cancelled; rule 15 deals with custody after cancellation, explained in the article on rules 15 and 15A.
Example (invented). The certificate of the Ujjwal Bharat Trust is suspended under section 13(1). It holds a hundred units of unutilised foreign contribution. Under rule 14(a) it may spend up to twenty-five units, with prior approval of the Central Government, for its declared aims and objects. The other seventy-five may be used only after the suspension is revoked.
Rule 14A: reasonable activity
Paragraph 7 of S.O. 3272(E) dated the 22nd June, 2026 inserted, after rule 14, rule 14A headed "Utilisation of foreign contribution for reasonable activity":
"For the purposes of cancellation under section 14 and renewal under section 16, an association shall be deemed to have undertaken reasonable activity in its chosen field for the benefit of society if it has utilised foreign contribution of not less than ten lakh rupees in the last two financial years for such purpose."
"Explanation.— The expression 'reasonable activity' shall be deemed to include only such activity as is undertaken out of, or by utilising, foreign contribution received in accordance with the Act."
| Element | Text |
|---|---|
| Purposes | Cancellation under section 14 and renewal under section 16 |
| Who | "An association" |
| Deemed result | Reasonable activity in its chosen field for the benefit of society |
| Condition | Utilised foreign contribution of not less than ten lakh rupees |
| Period | The last two financial years |
| Explanation | Only activity undertaken out of, or by utilising, foreign contribution received in accordance with the Act |
Where the phrase "reasonable activity" comes from
- Cancellation. Section 14(1)(e) allows cancellation "if the holder of the certificate has not been engaged in any reasonable activity in its chosen field for the benefit of the society for two consecutive years or has become defunct". See the article on section 14.
- Registration. Section 12(4)(b) requires that a registration applicant has undertaken reasonable activity in its chosen field (the Act prints "filed", a slip in both typed copies). Rule 9(1)(f) separately sets three years' existence and rupees fifteen lakh spent on core activities; see the article on rule 9.
- Renewal. Section 16, as amended by paragraph 11 of the Amendment Act, 2020, allows the Central Government to inquire, before renewing, whether the person has fulfilled all conditions in section 12(4). See the article on section 16.
Reading rule 14A
- It deems; it does not define. The test says an association "shall be deemed" to have undertaken reasonable activity if it has utilised not less than ten lakh rupees in the last two financial years. The rule does not say that an association below the figure has not undertaken reasonable activity, nor how section 14(1)(e) is to be read for one that falls below it.
- Utilised, not received. The figure is of foreign contribution utilised.
- Foreign contribution only. The Explanation limits "reasonable activity" to activity undertaken out of, or by utilising, foreign contribution received in accordance with the Act. Activity funded from other sources does not count towards the deeming.
- Different from rule 9(1)(f). Rule 9(1)(f) is a registration test of three years and rupees fifteen lakh on core activities over three financial years. Rule 14A is a test for cancellation and renewal: ten lakh rupees over two financial years.
Example (invented). The Sankalp Foundation's certificate is up for renewal. In its last two financial years it utilised foreign contribution of twelve lakh rupees on its stated purposes. Under rule 14A it is deemed to have undertaken reasonable activity for the purposes of renewal. Another body that spent eight lakh rupees of foreign contribution and four lakh rupees of local donations in the same period is not covered by the deeming on the figures of foreign contribution, and its position under the Act should be examined with advice.
Need help with suspension or an activity test?
Both rules turn on figures from your accounts and on the exact dates of orders. Book a legal consultation and bring the order, the latest utilisation statements and the Form FC-4 returns for the last two financial years.
Key takeaways
- During suspension, up to twenty-five per cent. of the unutilised amount may be spent with prior approval for the declared aims and objects; the rest only after revocation (rule 14).
- Rule 14A deems reasonable activity where not less than ten lakh rupees of foreign contribution was utilised in the last two financial years.
- Rule 14A applies for cancellation under section 14 and renewal under section 16.
- Only activity out of foreign contribution received in accordance with the Act counts (Explanation).
- Rule 9(1)(f) is a separate registration test.
Read next
- Section 13: suspension of certificate
- Section 14: cancellation of certificate
- Section 16: renewal of certificate
- Rules 15 and 15A: custody after cancellation and voluntary surrender
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.