Section 3 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.
Section 3 is the core prohibition of the Act. It names the people and bodies that may not accept foreign contribution at all, and it also bars anyone from receiving or carrying foreign money on their behalf. The Amendment Act, 2020 changed clause (c) and the Explanation.
This article reads section 3 as per the Act as enacted, read with the Foreign Contribution (Regulation) Amendment Act, 2020 (33 of 2020), applying paragraph 2 of that Act to sub-section (1). Later amendments should be checked.
No foreign contribution may be accepted by a candidate for election, a registered newspaper's correspondent, columnist, cartoonist, editor, owner, printer or publisher, a public servant, Judge, Government servant or employee of a body controlled or owned by the Government, a member of any Legislature, a political party or its office-bearer, an organisation of a political nature notified under section 5, or a news or current-affairs broadcaster and its senior staff. Nobody may accept or carry such money on their behalf.
Section 3(1): the eight classes
Section 3(1) says no foreign contribution shall be accepted by any:
- (a) candidate for election;
- (b) correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper;
- (c) public servant, Judge, Government servant or employee of any corporation or any other body controlled or owned by the Government (as substituted in 2020);
- (d) member of any Legislature;
- (e) political party or office-bearer thereof;
- (f) organisation of a political nature as may be specified under section 5(1) by the Central Government;
- (g) association or company engaged in the production or broadcast of audio news or audio visual news or current affairs programmes through any electronic mode, or any other electronic form as defined in clause (r) of sub-section (1) of section 2 of the Information Technology Act, 2000 (as printed), or any other mode of mass communication; and
- (h) correspondent or columnist, cartoonist, editor, owner of the association or company referred to in clause (g).
If you are unsure whether anyone on your board or staff falls in these classes, a short legal consultation is a sensible step before any application is made. The terms "candidate for election", "Legislature" and "registered newspaper" are defined in section 2 and explained in the article on person, association, political party and Legislature. For the electronic-form reference, our post on the Information Technology Act, 2000 definitions is on a separate law.
What the Amendment Act, 2020 changed in section 3(1)
| As enacted | After the 2020 Amendment Act |
|---|---|
| Clause (c): "Judge, Government servant or employee of any corporation or any other body controlled or owned by the Government" | Clause (c) is substituted: "public servant, Judge, Government servant or employee of any corporation or any other body controlled or owned by the Government" |
| One Explanation: in clause (c) and section 6, "corporation" means a corporation owned or controlled by the Government and includes a Government company as defined in section 617 of the Companies Act, 1956 | Two Explanations substituted (see below) |
The substituted Explanations are:
- Explanation 1: for clause (c), "public servant" means a public servant as defined in section 21 of the Indian Penal Code.
- Explanation 2: in clause (c) and section 6, "corporation" means a corporation owned or controlled by the Government and includes a Government company as defined in clause (45) of section 2 of the Companies Act, 2013.
So the single change in the list is the addition of "public servant", and the changed Explanation points the Government-company definition at the Companies Act, 2013. The reference to the Indian Penal Code is quoted as printed in the Amendment Act; check the current law for the corresponding provision.
A practical result: the trustees of an organisation should look at who sits on the board. If a trustee or office-bearer is an employee of a Government-controlled body, the question under clause (c) is whether that person is accepting foreign contribution himself. Section 3(1) names the persons who may not accept; it does not by itself say what happens to an organisation of which they are members.
Section 3(2): acting on behalf of others
Section 3(2) is aimed at the intermediary.
- (a) No person resident in India, and no citizen of India resident outside India, shall accept any foreign contribution, or acquire or agree to acquire any currency from a foreign source, on behalf of any political party or any person referred to in sub-section (1), or both.
- (b) No person resident in India shall deliver any currency, Indian or foreign, which has been accepted from any foreign source, to any person if he knows or has reasonable cause to believe that the other person intends, or is likely, to deliver it to any political party or any person referred to in sub-section (1), or both.
- (c) No citizen of India resident outside India shall deliver such currency to (i) any political party or any person in sub-section (1), or both, or (ii) any other person, if he knows or has reasonable cause to believe that the other person intends, or is likely, to deliver it to a political party or a person in sub-section (1), or both.
A drafting note: In the base copy of the Act, clause (c) runs on at the end of the same line as clause (b); read it as a separate clause. The knowledge test, "knows or has reasonable cause to believe", appears in (b) and (c)(ii) but not in (a).
Example (invented). Mr. Arjun Rao, who lives in Bengaluru, is asked by an overseas acquaintance to collect a sum of money from a foreign source and hand it to a candidate in a municipal election. Section 3(2)(a) bars him from accepting it on behalf of the candidate, and if he already holds the money he may not pass it on if he knows the candidate is the intended end-recipient.
Section 3(3): money held for the section 9 persons
Section 3(3) says no person receiving any currency from a foreign source on behalf of any person or class of persons referred to in section 9 shall deliver it (a) to any person other than the person for which it was received, or (b) to any other person, if he knows or has reasonable cause to believe that the other person intends, or is likely, to deliver it to a person other than the one for which it was received. Section 9 is explained in the article on the power to prohibit.
Exceptions and consequences
Section 3 is subject to the exceptions in section 4, for example pay received in the ordinary course of business, remittances through official channels and contribution from a relative, with a proviso against using them for other purposes. Clause (f) depends on an order under section 5. Acceptance of foreign contribution in breach of the Act is punishable under section 35; see sections 35 and 36.
The prohibition covers acceptance. An organisation that has a certificate under section 12 and receives money lawfully may still not hand it to a person barred by section 3, and section 7, as substituted, bars any transfer by a registered person to any other person.
Need help with a compliance question on foreign money?
If you suspect that a trustee, member or donor falls in one of the classes above, it is better to take advice before accepting or handing over any money. You can book a legal consultation and bring the list of office-bearers and the donor details.
Key takeaways
- Section 3(1) has eight classes, and clause (c) now begins with "public servant" because of the Amendment Act, 2020.
- The 2020 Act replaced the single Explanation with two: one on "public servant" by reference to the Indian Penal Code, and one on "corporation" by reference to the Companies Act, 2013.
- Section 3(2) bars acceptance or delivery of currency on behalf of a political party or a person in sub-section (1).
- Section 3(3) bars delivery of money received for the section 9 persons to anyone else.
- Exceptions are in section 4, and breach is punishable under section 35.
Read next
- Section 4: persons to whom section 3 does not apply
- Section 5: organisation of a political nature
- Section 9: power to prohibit receipt
- Section 8: utilisation and administrative expenses
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.