Foreign Contribution

FC means donation, delivery, or transfer made by any foreign source of:–

1. Any article other than personal gifts of market value not exceeding such sum as may be specified by the Central Government.
2. Any currency whether Indian or foreign.
3. Any security including foreign security.

Notes: This will also cover:

1. Contribution received from any person who has in turn received it from a foreign source
2. Interest accrued on FC deposited in the bank

However, any amount received, by any person from any foreign source in India, by way of fee (including fees charged by an educational institution in India from foreign student) or towards cost in lieu of goods or services rendered by such person in the ordinary course of business, trade or commerce, whether within India or outside India or any contribution received from an agent of a foreign source towards such fee or cost shall be excluded from the definition of foreign contribution.

3.1 Foreign Source

It includes:–

1. Government of any foreign country or any agency of such Government;
2. Any international agency except United Nations or any of its specialised agencies, World Bank, International Monetary Fund or such other agency as the Central Government may, by notification in the Official Gazette, specify;
3. Foreign company;
4. Corporation, other than foreign company, incorporated outside India;
5. A multinational corporation;
6. A company where more than 50% of its share capital is held by a foreign government or citizens of a foreign country or foreign entity (includes company, corporations, trusts, societies or other associations of individuals registered in foreign country);
7. A foreign trust or foreign foundation and includes trust or foundation mainly financed by a foreign country; and
8. Citizen of a foreign country.
9. Foreign Trade Union, Society, Club or Other Association.

Note: Amount received from a non-resident Indian citizen in foreign currency, would not be treated as foreign source.