The Foreign Contribution (Regulations) Act started with an objective to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations and It prohibits the acceptance and utilisation of foreign contribution or foreign hospitality for the activities can be harmful to the national interest.
Foreign Contribution Regulation Act, 2010 came into force with effect from 11^th May 2011. The Act involves safeguarding national security.

“Foreign Contribution” means any donation or contribution or hospitality receives from any Foreign Source. It includes the following items:

Any Gift or an Article given to a person for personal use.
Any currency whether foreign or Indian in the form of donation or contribution.
The amount received, by way of fee exp. Indian Institute receives a fee from foreign student

Who are eligible to receive foreign contribution?

Any Person registered with FCRA 2010, must have a definite cultural, economic, educational, religious or social programme.
Any Non-Governmental Organization registered with FCRA can receive foreign contribution or donation from foreign sources.

Foreign Contribution is prohibited for:

1. Election candidate, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper, Judge, Government servant or Govt. Employee, Any Legislature Member, political party
2. An association or company deals in the production or broadcast of audio news or audiovisual news through any electronic mode, Person resident of India or a Person citizen of India residing outside of India.

Refer to Section-3 of FCRA Act 2010.

Some Clarifications:

A contribution made by a person who is an Indian citizen and lives outside of India not on behalf of any foreign organization but from personal saving shall not be treated as foreign contribution.

Any contribution receives from a person is the origin of India but a citizen of other countries shall be treated as foreign contribution and same is applicable on PIO and OCI cardholder.

Any help receives from a relative in the form of money from the foreign source shall not be treated foreign contribution but any person receiving foreign contribution in excess of one lakh rupees in one financial year needs to inform the Central Government within thirty days from the date of receipt. This form is available on the website: fcraonline.nic.in

Fee receives by any foreign delegate/ participant for attending a seminar/conference/event organized in India and this is going to utilize for meeting the expenditure of hosting organization shall not be treated as foreign contribution.

Any article or gift receives from foreign source for the personal use whose market value in India on the date of such gift exceeds rupees 25000/- shall be treated as foreign contribution.

Who will be called as Foreign Source under the act:

The government itself or Agency of Govt. body of any foreign country or territory.
Any International agency but excludes United Nations, The World Bank, International monetary fund or agencies time to time specify by central govt.

Any Corporation formed in a foreign country whether not being a foreign company.

Any company registered here in India under the act 1956 of companies act, its share capital held, either in singly or aggregate by Govt. of a foreign country, The citizen of a foreign country, Trusts, Societies or other associations of individuals.