The Ministry of Home Affairs (MHA), on June 22, 2026, amended the compounding provisions under the Foreign Contribution (Regulation) Act, 2010 (FCRA). The amendments revise the penalties applicable to certain violations relating to the receipt and utilization of foreign contributions.
The following has been stated:
•Where an organization incurs administrative expenses beyond the permissible limit of 20% of the foreign contribution received, the compounding amount shall be ₹1 lakh or 5% of the excess amount spent, whichever is higher.
•Utilization of foreign contribution in speculative activities shall attract a penalty of 30% of the amount invested or ₹1 lakh, whichever is higher, along with 100% of the returns earned from such investments.
•Use of foreign contribution for purposes other than those for which it was received shall attract a compounding amount of 30% of the amount so utilized or ₹1 lakh, whichever is higher.
•Violations involving acceptance or utilization of foreign contribution without the requisite registration or prior permission under Section 11 shall attract a penalty of ₹1 lakh or 30% of the foreign contribution received or utilized, whichever is higher.
•Utilization of foreign contribution for a purpose, State, or Union Territory not covered under the registration shall attract a penalty of 30% of the amount so utilized or ₹1 lakh, whichever is higher.
Further, the notification clarifies that the amended provisions shall apply prospectively and shall not affect cases already disposed of before the publication of the notification, nor shall such cases be reopened.
Please refer to the notification for further details.
[S.O. 3287(E).]
