Sections 21 and 22 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.
Two quite different situations sit side by side in Chapter IV. Section 21 is about a person who has been duly nominated as a candidate for election and who had received foreign contribution in the one hundred and eighty days before the nomination. Section 22 is about what happens to assets created out of foreign contribution when the person who held them ceases to exist or becomes defunct.
This article reads sections 21 and 22 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 candidate for election who received any foreign contribution within one hundred and eighty days immediately preceding the date of nomination must give an intimation of its amount, source, manner of receipt and utilisation. Where a person permitted to accept foreign contribution ceases to exist or has become defunct, its assets are disposed of under the law of its registration or incorporation, and, if there is no such law, by the authority the Central Government specifies by notification.
Section 21: the candidate's intimation
Section 21 says: "Every candidate for election, who had received any foreign contribution, at any time within one hundred and eighty days immediately preceding the date on which he is duly nominated as such candidate, shall give, within such time and in such manner as may be prescribed, an intimation to the Central Government or prescribed authority or both as to the amount of foreign contribution received by him, the source from which, and the manner in which, such foreign contribution was received and the purposes for which and the manner in which such foreign contribution was utilised by him."
A person who has taken funds from abroad and may stand for election should take a short legal consultation before nomination to see whether the look-back period catches the receipt.
The elements
| Element | Text of section 21 |
|---|---|
| Who | A "candidate for election", a person duly nominated as a candidate for election to any Legislature (section 2(1)(d)) |
| Look-back | Foreign contribution received at any time within one hundred and eighty days immediately preceding the date of nomination |
| What to report | The amount; the source and the manner of receipt; the purposes for which and the manner in which it was utilised |
| To whom | The Central Government or prescribed authority or both |
| When and how | Within such time and in such manner as may be prescribed |
"Legislature" is wide: it includes Parliament, State and Union territory assemblies, municipalities, district and regional councils in certain north-eastern States, panchayats and any other elective body notified, as explained in the article on the definitions in section 2. A person standing for a municipal or panchayat seat is therefore within section 21.
How it fits with section 3
Section 3(1)(a) says no foreign contribution shall be accepted by a candidate for election; see the article on section 3. Section 21 deals with a different moment: contribution the person had received in the one hundred and eighty days before nomination, when he was not yet a candidate. The Act requires him to report it, whatever its nature. The section does not say that receipt before nomination was lawful or unlawful, and it does not state a consequence for the money; it requires intimation. Whether a particular receipt was permitted must be examined under the rest of the Act.
The rule and the form for the intimation are Rule 18 and Form FC-1, explained in the article on rules 18 and 19. This article does not state what the rule says beyond the form's name. A false intimation is an offence only where section 33(a) applies: that clause speaks of false intimation under section 9(c) or section 18, and does not mention section 21. The text is silent on whether section 21 is covered by another penalty; the residual penalty in section 37 for non-compliance with a provision for which no separate penalty is provided is explained in the article on sections 37 and 38. Whether it applies in a particular case is a legal question for that case.
Example (invented). Mr. Dinesh Pillai receives a sum from a foreign relative for a social project, and about four months later is duly nominated as a candidate for a panchayat election. His receipt was within one hundred and eighty days before nomination. Section 21 requires him to give an intimation of the amount, the source, the manner of receipt and how he used the money, within the time and in the manner prescribed.
Section 22: disposal of assets
Section 22 says: "Where any person who was permitted to accept foreign contribution under this Act, ceases to exist or has become defunct, all the assets of such person shall be disposed of in accordance with the provisions contained in any law for the time being in force under which the person was registered or incorporated, and in the absence of any such law, the Central Government may, having regard to the nature of assets created out of foreign contribution received under this Act, by notification, specify that all such assets shall be disposed off by such authority, as it may specify, in such manner and procedure as may be prescribed."
The section has a two-step order.
- First, the person's own law. If a law under which the person was registered or incorporated deals with disposal, that law governs. For a society, trust or company that law might be the Societies Registration Act, 1860, the Indian Trusts Act, 1882 or the Companies Act; our posts on dissolution of a society and surplus property and how a trust is extinguished explain those laws separately, and this article does not describe them.
- Failing that, a notification. In the absence of any such law, the Central Government may, by notification, specify that the assets be disposed of by such authority as it specifies, in the manner and procedure prescribed. No such notification is in the texts consulted, and none is described here.
"All the assets" is the first phrase of the first limb, while the second limb speaks of "assets created out of foreign contribution". The Act does not explain the difference; read the words as printed.
Section 22 applies to a person who "was permitted to accept foreign contribution". Where a certificate is cancelled or surrendered, section 15 separately vests the foreign contribution and the assets created out of it in the prescribed authority; see the article on sections 14A and 15.
Need help with a candidate or closure question?
Both provisions are rarely met in routine work, which is why mistakes happen. If you are a prospective candidate with an overseas link, or a governing body closing down an organisation that has held foreign contribution, speak to our legal consultation team before acting.
Key takeaways
- Section 21 applies to a candidate for election who received foreign contribution within one hundred and eighty days immediately before nomination.
- The intimation covers amount, source, manner of receipt, purposes and manner of utilisation, to the Central Government or prescribed authority or both.
- Section 22 applies where a person permitted to accept foreign contribution ceases to exist or becomes defunct.
- Assets are disposed of under the person's own law first; failing that, by the authority the Central Government specifies by notification.
- Form FC-1 and rule 18 deal with the candidate's intimation.
Read next
- Section 3: who cannot accept foreign contribution
- Sections 14A and 15: surrender and management of foreign contribution
- Sections 18 to 20: intimation, accounts and audit
- Rules 18 and 19: election candidates and the limit for confiscation
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.