Sections 18 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.
Receiving foreign contribution is only the start of the duty. Section 18 requires the holder to report what it received and how it used it. Section 19 requires it to keep accounts and records. Section 20 lets the Central Government have the books audited if the intimation is missing, wrong or doubtful.
This article reads sections 18 to 20 as per the Act as enacted, read with the Foreign Contribution (Regulation) Amendment Act, 2020 (33 of 2020), which did not change these sections. Later amendments should be checked.
A holder of a certificate or prior approval must give an intimation to the Central Government of each foreign contribution received, its source and manner of receipt, and its purposes and manner of utilisation, with a bank-certified statement (section 18). It must maintain an account and a record in the prescribed form (section 19). If the intimation is not furnished, is not in accordance with law, or raises reasonable cause to believe the Act is contravened, the Government may order an audit of the books (section 20).
Section 18: intimation
Our books of accounts and compliance service can set up the records from which the intimation is prepared.
Section 18(1)
"Every person who has been granted a certificate or given prior approval under this Act shall give, within such time and in such manner as may be prescribed, an intimation to the Central Government, and such other authority as may be specified by the Central Government". The intimation covers:
- the amount of each foreign contribution received by it;
- the source from which and the manner in which the contribution was received; and
- the purposes for which, and the manner in which, the contribution was utilised.
Note that section 18(1) speaks of a certificate or "prior approval", while elsewhere the Act speaks of "prior permission". The words are the Act's own; read the section as printed and apply it to a holder of prior permission. The time and manner of the intimation are left to the Rules. The annual return rule and Form FC-4 are explained in the article on rule 17 and the article on Forms FC-1, FC-2 and FC-4. This article does not state what they say.
Section 18(2)
"Every person receiving foreign contribution shall submit a copy of a statement indicating therein the particulars of foreign contribution received duly certified by officer of the bank or authorised person in foreign exchange and furnish the same to the Central Government along with the intimation under sub-section (1)." So two papers go together: the holder's own intimation and a statement of the receipts certified by an officer of the bank or an authorised person in foreign exchange.
The bank side of this is the reporting duty in section 17(2); see the article on section 17. A holder whose books and bank statements match finds this a routine task; one whose receipts are spread across accounts without a ledger does not. An incorrect intimation has a consequence beyond audit: section 33(a) punishes a person who knowingly gives a false intimation under section 18 (or section 9(c)), with imprisonment up to six months, or fine, or both, on conviction by a court; see the article on sections 33 and 34.
Section 19: maintenance of accounts
"Every person who has been granted a certificate or given prior approval under this Act shall maintain, in such form and manner as may be prescribed, (a) an account of any foreign contribution received by him; and (b) a record as to the manner in which such contribution has been utilised by him."
| Clause | What must be kept |
|---|---|
| (a) | An account of any foreign contribution received |
| (b) | A record of how the contribution has been utilised |
The form and manner are prescribed. The rule on separate sets of accounts and records, rule 11, is explained in the article on rules 10 and 11; this article does not state what it says. These records are the evidence for every other duty in the Act: the percentage limit on administrative expenses in section 8 (see the article on section 8), the intimation under section 18 and any inquiry.
Section 20: audit of accounts
Section 20 applies where a person who has been granted a certificate or given prior permission:
- fails to furnish any intimation under the Act within the time specified;
- furnishes an intimation that "is not in accordance with law"; or
- after inspection of the intimation, the Central Government "has any reasonable cause to believe that any provision of this Act has been, or is being, contravened".
In any of those cases the Central Government may, "by general or special order, authorise such gazetted officer, holding a Group A post under the Central Government or any other officer or authority or organisation, as it may think fit, to audit any books of account kept or maintained by such person". The officer has "the right to enter in or upon any premises at any reasonable hour, before sunset and after sunrise, for the purpose of auditing the said books of account".
Proviso: "any information obtained from such audit shall be kept confidential and shall not be disclosed except for the purposes of this Act."
Two points of structure. First, the audit is by an authorised officer, authority or organisation appointed by the Central Government; it is not the holder's own audit of its accounts. The holder's audit and the annual statements are matters for the Rules. Second, section 20 is distinct from inspection and seizure under sections 23 and 24: inspection is triggered by reasons recorded in writing to suspect a contravention, and applies to a wider set of persons; see the article on sections 23 and 24.
Example (invented). Lok Seva Samiti files its intimation late and with figures that do not match the bank-certified statement. The Central Government has reason to believe a provision of the Act has been contravened and authorises a Group A gazetted officer to audit the Samiti's books. The officer may enter its office at a reasonable hour, before sunset and after sunrise, to audit them, and must keep what he learns confidential except for the purposes of the Act.
Need help with FCRA books and records?
Most intimation problems start with accounts that were not built to answer the question. For help setting up an FCRA ledger, reconciling it to bank statements and preparing for a review, see our books of accounts and compliance service.
Key takeaways
- Section 18 requires an intimation of each contribution received, its source and manner of receipt, and its purposes and manner of utilisation, with a bank-certified statement.
- Section 19 requires an account of contribution received and a record of its utilisation, in the prescribed form and manner.
- Section 20 allows an audit of books by an authorised officer if the intimation is missing, wrong or raises reasonable cause to believe the Act is contravened.
- Information from the audit is confidential except for the purposes of the Act.
- A knowingly false intimation under section 18 is an offence under section 33(a).
Read next
- Section 17: the FCRA Account
- Sections 21 and 22: candidates and disposal of assets
- Sections 23 and 24: inspection and seizure
- Rule 17: annual return in Form FC-4
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.