FCRA suspension, cancellation and what happens next

The Ministry of Home Affairs (MHA) can suspend an NGO’s FCRA registration for up to 180 days, extendable by another 180, while it considers cancelling it, and can cancel it on the grounds in Section 14 of the Foreign Contribution (Regulation) Act, 2010 (FCRA), after giving the organisation a chance to be heard. A cancelled organisation can’t receive or use foreign contribution, can’t reapply for three years, and its foreign money and the assets bought with it pass to an authority the government prescribes.

Enforcement is common. The government says nearly 20,000 registrations were cancelled, and about 15,000 more deemed to have ceased, over the last decade, many for administrative reasons such as unfiled returns or missed renewals. This guide explains the four ways a registration can be frozen or end, the grounds and the process, what happens to the money, how to challenge an order and how to avoid all of it. It is for trustees, chief executives and finance staff of FCRA-registered organisations, and for funders who want to understand an NGO’s FCRA history.

Four different things

Suspension: what it means day to day

Under Section 13, the MHA can suspend a registration while it considers whether to cancel it. Since the 2020 amendment, a suspension can run for 180 days and be extended by up to 180 more. While it lasts:

• the organisation can’t receive foreign contribution without the MHA’s specific approval;
• it may spend up to 25% of its unused foreign contribution on its declared aims, with prior approval, and the other 75% waits until the suspension is revoked;
• and it can’t apply for a fresh registration or prior permission while the suspension continues (Section 12(3)).

Since 2020 the MHA has also had the power, after a summary inquiry, to restrict a prior-permission holder’s use of its unspent foreign contribution while a fuller inquiry runs.

The grounds for cancellation

Ground (e) has new force. Since 22 June 2026, Rule 14A says an organisation has undertaken “reasonable activity” only if it has used at least ₹10 lakh of foreign contribution in the last two financial years, and only foreign-funded activity counts. Until then the phrase was never defined. A registered organisation that receives little foreign money could now face cancellation, not just refusal at renewal.

Many cancellations follow paperwork failures. According to figures the MHA gave the Joint Parliamentary Committee, as reported by India CSR in October 2026, 21,983 registrations had been cancelled, 91.3% of them for not filing annual returns; another outlet puts cancellations since 2015 at 22,496, and the government’s own factsheet says “nearly 20,000” over the last decade. The counts differ by source and date.

The process and your right to be heard

Section 14(2) says no certificate may be cancelled unless the organisation has had a reasonable opportunity of being heard. Expect a notice setting out the grounds, and use it:

1. Read the notice carefully, and note the deadline for your reply.
2. Take advice at once from a lawyer or chartered accountant who knows the FCRA.
3. Reply fully and on time, ground by ground, with documents: returns and their acknowledgements, bank statements, activity reports and board minutes.
4. Fix what can be fixed, such as an unfiled return or an unreported change, and say that you have.
5. Keep a complete record of everything you send and receive; you’ll need it for any revision or court case.

The MHA can also have an organisation’s books audited under Section 20 if its returns are late or wrong or it suspects a breach, and it may inquire before renewing a registration.

What happens to the money and the assets

Under Section 15, when a registration is cancelled or surrendered, the foreign contribution and the assets created from it vest in an authority the government prescribes. The MHA describes this as a prescribed state government authority, but it also says the states couldn’t take over, maintain or manage these assets under Section 15 as it stands, leaving “thousands of crores” in limbo. A registration that ceases at the end of its five years leaves the organisation unable to receive or use foreign contribution, including what it already holds.

Since 2023, Form FC-4 has asked for detailed tables of the assets created from foreign contribution, so the MHA has a yearly record of what each organisation holds.

Getting registered again

• After cancellation, no registration or prior permission for three years from the date of cancellation (Section 14(3)).
• After cessation, the organisation must apply afresh, meeting the conditions that apply on the day it applies.
• Indian money is unaffected. The FCRA governs foreign contribution only. An organisation whose registration was cancelled can still receive Indian donations, and CSR from Indian companies that aren’t foreign sources, though funders will ask what happened. See choosing an NGO partner.

The MHA’s FCRA portal, fcraonline.nic.in, publishes lists of organisations whose registrations have been cancelled or have ceased.

Challenging an order: revision and the courts

Section 32 lets the central government revise an order, of its own motion within a year of the order, or on an application by the registered organisation. The application must be made within one year of the date the order was communicated to it, or it otherwise learnt of it, whichever is earlier, and the government can admit a late application if there was sufficient cause for the delay. It needs the prescribed fee, and since July 2022 revision applications have been made online.

Organisations can also challenge orders in the High Courts. On 8 April 2022, in Noel Harper v. Union of India, the Supreme Court upheld the main 2020 amendments, including the ban on transfers and the SBI New Delhi account. Take legal advice quickly: the one-year limit runs from the date the order reaches you.

How to avoid it

Most of the grounds can be avoided with steady, unglamorous compliance:

Our compliance checklist sets out every recurring duty, and our guide to using foreign contribution covers the spending rules.