MHA notifies new FCRA rules: Tightens social media acts

The Ministry of Home Affairs (MHA) has notified the Foreign Contribution (Regulation) Amendment Rules, 2026, introducing a series of changes aimed at strengthening compliance, improving transparency, and streamlining the regulation of foreign contributions received by associations in India. Issued under the Foreign Contribution (Regulation) Act, 2010, the new rules came into force late on Monday from its publication in the Official Gazette.
A key highlight of the amendment is the expanded definition of "key functionary," which now includes directors of companies, partners in firms, trustees, "karta" of Hindu undivided families, and office bearers or individuals responsible for management and decision-making in organizations.Under the new rules, foreign nationals—except those of Indian origin—will ordinarily not be eligible to hold key positions in NGOs seeking registration or prior permission under the Foreign Contribution (Regulation) Act. “After sub-rule (5), the following Explanations shall be inserted, namely:— ‘Explanation 1.— It is hereby clarified that an association having foreign nationals, other than those of Indian origin, as its key functionaries shall ordinarily not be considered eligible for grant of registration or prior permission under the Act’," the notification states.
However, the rules provide an exception. The Centre may, on a case-by-case basis, permit foreign nationals to serve as key functionaries in an association. “Central Government may, by order, specify such cases or circumstances in which foreign nationals may be permitted to be key functionaries of an association for the purposes of consideration of registration or prior permission, and the conditions to be fulfilled for such consideration," the notification states.
The penalty for defraying foreign contributions beyond 20 per cent of the contributions received for administrative expenses, in contravention of section 8 of the Act, will be Rs 1 lakh or 5 per cent of the amount spent beyond the limit, whichever is higher, the notification said.  In case a foreign contribution was utilised for purposes other than those for which it was received, a penalty of 30 per cent of the amount utilised for purposes other than the purpose for which such foreign contribution was received, or Rs 1 lakh, whichever is higher, shall be levied, it added. A similar penalty will also be slapped in cases of accepting or utilising foreign contributions in contravention of the Act, or utilising the funds for a purpose or in a state or a Union Territory for which registration has not been granted, it said.