FCRA Amendment Bill, 2026: Key Changes, Asset Vesting Rules and Compliance Impact on NGOs | EduLaw
EduLaw EditorialCase StudiesA plain-language, legally cautious explainer on the FCRA Amendment Bill, 2026 — proposed asset vesting rules, the Designated Authority, key functionary liability and what NGOs, trusts and Section 8 companies should do now. The Bill is pending and not yet law.
Skip to main content EduLaw Contents ▾ 1. What is the Bill trying to change? 2. Existing law vs proposed Bill 3. Registration may "cease" 4. Designated Authority & asset vesting 5. Mixed-funded assets 6. Powers of the Designated Authority 7. Key functionaries' responsibility 8. Other proposed changes 9. Legal & constitutional concerns 10. Compliance checklist 11. Snapshot summary table 12. FAQs 13. Conclusion 14. Get help from EduLaw References EduLaw Explains | FCRA FCRA Amendment Bill, 2026 The proposed changes every NGO, trust and association must understand Introduced in Lok Sabha Pending Bill Proposed changes only The Foreign Contribution (Regulation) Amendment Bill, 2026 was introduced in the Lok Sabha on 25 March 2026 and, as of this writing, remains under consideration of Parliament. [2] It matters because it does not simply tweak reporting formats — it proposes an entirely new framework for what happens to an organisation's foreign contribution and the assets built from it once registration is cancelled, surrendered, or lapses. With roughly 14,449 active FCRA certificates, 22,498 cancelled, and 15,212 deemed to have ceased as of mid-July 2026, [2] the proposed changes could eventually touch a very large number of schools, clinics, community centres and places of worship built over the past decade and a half. 📅 Published: 27 July 2026 🔄 Updated: 27 July 2026 ⏱ Reading time: calculating… 🔗 Copy link to this article FCRA Amendment Bill, 2026 Editorial Cover Table of Contents What is the Bill trying to change? Existing law versus proposed Bill Registration may "cease" Designated Authority and asset vesting Mixed-funded assets What can the Designated Authority do? Responsibility of key functionaries Other important proposed changes Legal and constitutional concerns Practical compliance checklist One-snapshot summary table Frequently asked questions Conclusion Get help from EduLaw References Section 1 What is the Bill trying to change? The Foreign Contribution (Regulation) Act, 2010 already contains a provision — Section 15 — under which foreign contribution and assets created out of it vest in a prescribed authority once a certificate is cancelled or surrendered. [4] That provision has existed since 2010. The perceived gap that the Bill seeks to address is not the existence of vesting as a concept, but the absence of a detailed, workable procedure around it: how custody is actually taken, who manages the property in the interim, what happens to assets that sit in limbo for years, and — critically — what happens when a certificate is neither cancelled nor surrendered but simply lapses because it was not renewed in time. According to PRS Legislative Research, nearly 22,000 FCRA registrations have been cancelled and roughly 15,000 have been deemed to have ceased over the past decade, and state authorities have reportedly struggled to take possession of, maintain or manage the underlying assets under the bare framework of the existing Section 15. [4] The government's own position, set out in an official backgrounder, is that such assets have in some cases remained in custodial limbo indefinitely, without legal finality, because it is neither feasible nor desirable to preserve them forever merely on the chance that an organisation may seek fresh registration at some future date. [4] The Bill's proposed response follows a simple conceptual sequence, which recurs throughout the rest of this article: Vesting Assets and foreign contribution pass into the Designated Authority → Management The Authority supervises, maintains and may run the underlying activity → Transfer or disposal Assets are handed to a government body, sold, or otherwise disposed of if not restored Illustrative fictional example. Consider a hypothetical trust, "Nirmal Seva Samiti," which used foreign contribution over several years to build and equip a small rural clinic. If its FCRA certificate were cancelled, surrendered, or allowed to lapse under the Bill's proposed framework, the clinic building and equipment funded from foreign contribution could provisionally vest in the Designated Authority, which would then be responsible for its supervision until the certificate is restored or a prescribed period lapses. This example is entirely fictional and used only to illustrate how the vesting-management-disposal sequence might operate; it does not describe any real institution. Section 2 Existing law versus proposed Bill The table below separates what the FCRA, 2010 presently provides from what the 2026 Bill proposes to change. Every row reflects only points that are supported by the Bill text, PRS Legislative Research's analysis, or official government material; where the Bill leaves details to be prescribed later by rules, that is stated explicitly rather than guessed at. Comparison of existing FCRA provisions and proposed changes under the 2026 Bill Issue Existing position Proposed position Practical impact Cessation of registration No formal "cessation" concept; only cancellation and voluntary surrender formally end registration. Certificate deemed to have ceased if no renewal application is made, renewal is denied, or renewal is not obtained before expiry. [4] Simple non-renewal, even for administrative reasons, may trigger the same consequences as cancellation. Renewal failure or refusal Registration lapses under Rules; no explicit asset consequence tied to renewal refusal in the Act's text. Treated as a form of cessation, triggering vesting of foreign contribution and assets. [4] Renewal deadlines become existential rather than purely administrative dates. Designated authority Section 15 vests assets in "such authority as may be prescribed" — in practice the concerned State/UT administration. [5] A distinct, centrally notified Designated Authority is created, with powers over vesting, supervision, management and disposal. [2] A new centralised institution replaces the state-level custodial role. Provisional vesting Vesting under Section 15 is, in practice, provisional and reversible on fresh registration, though the process is not elaborated. [5] Provisional vesting is codified explicitly, with defined obligations to return unutilised contribution and assets upon renewal, restoration or fresh registration. [2] Greater procedural clarity, alongside a more formal mechanism for the state to take custody sooner. Permanent vesting No explicit permanent-vesting mechanism; assets could remain in indefinite custodial limbo. [4] Permanent vesting proposed where registration is not renewed/restored/freshly granted within a prescribed period, or where the organisation becomes defunct or inoperative. [2] Assets once left in limbo can now be transferred or disposed of with finality — but this also removes the earlier de facto safety net of indefinite custody. Assets created partly from foreign contribution Ambiguous treatment under the existing Section 15 language. Bill proposes that even a partly foreign-funded asset vests entirely, subject to an application for return of a "distinct or ascertainable" domestic-funded portion. [2] Institutions with blended funding must prove clean segregation, or risk losing the entire asset. Disposal and transfer No detailed disposal framework exists in the current Act. Designated Authority may transfer permanently vested assets to central, state or local government bodies, or sell/dispose of them, with proceeds credited to the Consolidated Fund of India. [3] Provides administrative finality, but assets may permanently leave the voluntary/charitable sector. Responsibility of key functionaries Liability generally attaches to directors/persons in charge under general principles; no unified statutory definition exists. Bill defines "key functionaries" (directors, partners, trustees, Karta, office bearers, governing-body members, and other persons responsible for management) and creates a rebuttable presumption of liability. [4] Every trustee, director and office bearer needs personal clarity on potential exposure. Restrictions during suspension Section 13 restricts receipt and use of foreign contribution while a certificate is under suspension. The Bill's vesting framework operates around cancellation, surrender and cessation; suspension continues as an interim precautionary restriction under the existing framework. Suspension should be treated as a narrow compliance window before more severe, asset-related consequences can follow. Penalty changes Contravention punishable with imprisonment up to five years, fine, or both. [2] Maximum imprisonment reduced to one year, while fines are retained. [2] A more calibrated, less custodial approach to individual criminal liability, even as institutional (asset-related) consequences intensify. Prior approval before investigation No requirement of prior central government approval for investigating FCRA offences. Prior Central Government approval proposed to be required before an investigation into any offence under the Act can be initiated. [8] Adds a screening step that may filter out both frivolous and, potentially, some legitimate investigations. Prior-permission timelines Prior permission is valid for a specified purpose/amount, without a codified statutory utilisation deadline in the Act's text (though administrative circulars from 2025 had begun restricting timelines in practice). [8] Foreign contribution received under prior permission must be received and utilised within a period to be prescribed by rules. [8] One-time project grants will need tighter internal utilisation tracking and reporting. Note: Where the table says "to be prescribed," the Bill leaves the exact period, procedure or authority to be notified later through Rules. Treat these as open questions, not settled numbers. Section 3 Registration may "cease" One of the more consequential proposed changes is the introduction of a distinct concept of "cessation," which secondary commentary has associated with a proposed new provision often referred to as Section 14B. [6] It is worth being precise about how this differs from other ways an FCRA certificate can come to an end under the existing Act: Cancellation — a formal government order under Section 14, made on specified grounds such as a false statement, violation of certificate conditions, action taken in the public interest, or failure to engage in reasonable activity for two consecutive years. Voluntary surrender — an organisation itself gives up its certificate, a route made available by the 2020 amendment to the Act, generally where it no longer wishes to receive or use foreign contribution. Expiry — the five-year validity period simply runs out. Historically, this has sat in something of a grey zone: the certificate is no longer valid, but there was no single, codified label for this state of affairs. Refusal of renewal — the government considers a renewal application and declines to grant it. Non-filing of a renewal application — the organisation itself does not apply for renewal before the certificate lapses. The Bill proposes to treat expiry, refusal of renewal, and non-filing of a renewal application as forms of "deemed cessation," distinct from cancellation and surrender but proposed to carry broadly comparable asset-related consequences. [4] Why this matters Expiry may have consequences beyond merely preventing fresh receipt of foreign contribution. Under the Bill as proposed, it may also become a trigger for the vesting of an organisation's existing foreign-funded assets — even where the organisation has done nothing wrong and has simply allowed a certificate to lapse, for example because it no longer relies heavily on foreign funding. Simple hypothetical timeline (illustrative only; exact periods are yet to be prescribed): Year 0 — Certificate granted or renewed; five-year validity period begins. Year 4, roughly six months before expiry — Renewal window opens; organisation is expected to apply. Year 5, Day 0 — Certificate validity ends. If no application was filed, or the application was denied, or renewal was not obtained in time, cessation is deemed to occur. Day 0 onward — Under the Bill as proposed, foreign contribution and related assets (including partly foreign-funded assets) may provisionally vest in the Designated Authority. Within a period to be prescribed — If fresh registration, renewal or restoration is obtained, unutilised contribution and assets are proposed to be returned. After the prescribed period lapses without renewal or restoration — Vesting is proposed to become permanent. Section 4 Designated Authority and asset vesting The centrepiece of the Bill is the creation of a Designated Authority , a body to be notified by the central government, which is proposed to take over the vesting, supervision, management and disposal of foreign contribution and assets once a certificate is cancelled, surrendered or ceases. [2] Under the Bill as introduced, and as described in official clarifications, the Authority is proposed to exercise something akin to civil-court powers for these purposes and can direct the transfer or sale of vested property. [6] The proposed sequence is as follows. On cancellation, surrender or cessation, foreign contribution and assets created from it — including assets created only partly from foreign contribution — are proposed to vest provisionally in the Designated Authority. During this provisional phase, the Authority is proposed to supervise and maintain the assets and may use unutilised foreign contribution to manage them and related activities. [3] If, within a period to be prescribed, the organisation obtains a fresh certificate, or its registration is renewed or restored, the unutilised foreign contribution and the provisionally vested assets are proposed to be returned to it. If this does not happen within the prescribed period, vesting is proposed to become permanent , at which point the Authority may apply the assets for public purposes, transfer them to a government body, or dispose of them by sale, crediting proceeds and unutilised funds to the Consolidated Fund of India. [3] Registration cancelled, surrendered or ceases Provisional vesting in the Designated Authority Renewal or restoration within prescribed period? Yes → possible full return of unutilised contribution and assets No → permanent vesting; assets applied for public purpose, transferred to a government body, or sold Two points deserve cautious framing. First, the exact "prescribed period" for restoration — the window within which an organisation must renew or restore its certificate before vesting turns permanent — has not been fixed in the Bill's text itself and is left to be notified later. Second, the treatment of places of worship is a specific carve-out: official government clarifications state that the Designated Authority is required to preserve the religious character of any place of worship among vested assets and cannot convert, repurpose or secularise it. [5] That said, the precise manner in which such management is entrusted to a person is itself proposed to be prescribed later, so the operational detail is not yet settled. Government sources have also stated that any person aggrieved by an order of the Designated Authority may seek revision within 90 days and has a further right of appeal to the court of the District Judge. [5] [6] This is an important safeguard for challenging the Authority's specific orders — for example, how it manages or disposes of an asset — though, as discussed in Section 9, it is analytically distinct from the question of whether there is a specific appeal against the underlying government decision to refuse renewal in the first place. Section 5 Mixed-funded assets A significant practical and legal problem arises where a single asset — a building, a piece of equipment, an extension to an existing facility — is funded partly by domestic donations and partly by foreign contribution. Accounting for two funding streams that go into one physical asset is rarely as clean as accounting for two streams that fund two separate assets. The Bill proposes that such an asset vests in its entirety in the Designated Authority, and places the burden on the organisation to apply for the return of a "distinct or ascertainable" portion attributable to domestic funds. [2] Consider a purely illustrative, fictional scenario to see why this matters: Illustrative figures only — not drawn from any real project or organisation Source Amount Domestic donations ₹60,00,000 Foreign contribution ₹40,00,000 Total project cost ₹1,00,00,000 If this ₹1 crore were used to construct a single building — say, a new ward attached to an existing clinic — it may be relatively straightforward to state that 60% of the funds came from domestic sources. It is a different and harder question to show which physical part of the finished ward is "distinct or ascertainable" as the domestically funded portion, since bricks, cement, wiring and equipment funded from either source are, in practice, fused into one indivisible structure. This is precisely the kind of gap that a clean funding trail is designed to close before it becomes a dispute. For this reason, a contemporaneous, source-wise asset register — recording, at the time of construction or purchase, which invoices and disbursements were funded from which source, ideally supported by separate ledgers, bank statements and project-wise utilisation certificates — becomes far more than a bookkeeping nicety. Under the Bill's proposed framework, it may be the only practical evidence available to support an application for the return of a domestically funded portion of a mixed asset. Section 6 What can the Designated Authority do? Once assets are permanently vested, the Bill proposes to give the Designated Authority a defined — though still partly rules-dependent — set of powers. These are summarised in the checklist below, drawn from the Bill's provisions as reported by PRS Legislative Research and official clarifications. [3] [5] Management: supervise, maintain and manage vested assets and, where necessary, the related activities during both the provisional and permanent phases. Use for public purpose: apply permanently vested assets towards public purposes — for example, continuing to run a vested school or clinic for public benefit rather than shutting it down. Transfer to a government body: transfer permanently vested assets to ministries, departments or agencies of the central, state or local government (illustratively, a vested school could be transferred to an education department, and a vested hospital to a health department). Sale or disposal: where direct use for a public purpose is not feasible, dispose of assets through sale or other processes. Treatment of sale proceeds: credit proceeds of disposal, together with any unutilised foreign contribution, to the Consolidated Fund of India. Places of worship and religious character: where a permanently vested asset is fully or partly a place of worship, entrust its management to a person and in a manner to be prescribed, while ensuring that its religious character is maintained and not altered. The precise procedure for entrusting management of a place of worship, and the detailed criteria for choosing between transfer, public-purpose use and sale, are left to rules that have not yet been notified in final form as part of this Bill. Section 7 Responsibility of key functionaries The Bill proposes to introduce a defined expression — "key functionaries" — to capture the range of people who might be considered responsible for an organisation's conduct under the Act. Based on the Bill's provisions, this proposed definition is intended to include, where applicable to the organisational form in question: directors of a company, a partner in a firm, a trustee of a trust, the Karta of a Hindu undivided family, an office bearer or member of the governing body, managing committee or other controlling authority of a society, trust, trade union or association of individuals, and any other person responsible for the management of the organisation. [4] Importantly, liability under the proposed framework is not stated to be automatic in every case. The Bill proposes a rebuttable presumption: a key functionary is presumed liable for an organisational offence unless that person can establish either that the offence was committed without their knowledge, or that they exercised due diligence to prevent it. [4] This is a due-diligence defence, not a blanket exemption, and whether it succeeds in any given case would depend on the specific facts, the functionary's actual role, and the quality of evidence of diligence — matters that would ultimately be assessed through the appropriate legal process rather than presumed either way in the abstract. The Bill separately proposes a statutory duty: where an organisation ceases to exist or becomes defunct, its last key functionaries are required to notify the central government of that fact. Failing this notification, the Bill proposes that the organisation's foreign contribution stands to vest permanently in the Designated Authority. [4] This links personal, individual conduct directly to an institutional, asset-level consequence. Governance takeaway Board minutes, compliance calendars, renewal records and source-wise asset documentation may become central evidence of due diligence. Organisations that cannot show, on paper, who was responsible for FCRA compliance and what steps they took may find it harder to invoke the due-diligence defence if it is ever needed. Section 8 Other important proposed changes Card 1 Prior permission and prescribed utilisation period The proposal: Foreign contribution received under the prior-permission route (for organisations not holding a full registration certificate) must be received and utilised within a time period to be prescribed by rules, rather than simply for "the specific purpose" without a codified deadline. [8] What it means: One-time or project-specific grants will come with a hard clock attached, likely building on the administrative timelines (a three-year receipt window and four-year utilisation window) that circulars had already begun applying from 2025. [8] Example (illustrative, fictional): A hypothetical organisation receiving prior permission for a two-year vocational training project would need to both receive and fully spend the approved foreign contribution within the prescribed window, rather than treating the permission as open-ended. Practical concern: Multi-year or delayed infrastructure-heavy projects may find prescribed timelines tight, particularly where construction, procurement or regulatory approvals cause delay for reasons outside the organisation's control. Card 2 Restrictions during suspension The proposal: The Bill's asset-vesting architecture is built around cancellation, surrender and cessation; suspension under the existing Section 13 framework continues to operate as an interim, precautionary restriction that precedes these more severe outcomes. What it means: A suspended organisation should not assume it has indefinite breathing room — suspension is often a precursor to cancellation or a forced non-renewal scenario, both of which are now proposed to trigger vesting. Example (illustrative, fictional): A hypothetical trust under suspension pending an inquiry may find that if the inquiry results in cancellation, or if its certificate lapses during the suspension period without renewal, the newly proposed vesting consequences would apply. Practical concern: Organisations should treat any suspension notice as an urgent trigger for legal review, not a routine administrative pause. Card 3 Proposed reduction in maximum imprisonment The proposal: Maximum imprisonment for contravening the Act or its Rules is proposed to be reduced from five years to one year, with fines retained. [2] What it means: Individual criminal exposure for FCRA offences is proposed to become significantly less severe in terms of custodial punishment, even as institutional, asset-related consequences (vesting) are proposed to intensify. Example (illustrative, fictional): Under the proposed regime, an individual convicted of a qualifying offence could, in principle, face a maximum custodial term of one year rather than five, subject to the specific facts and any applicable fine. Practical concern: A lower maximum sentence does not reduce the importance of compliance — the organisational consequence of losing vested assets can be far more significant in practice than the individual criminal exposure. Card 4 Prior Central Government approval before investigation The proposal: Prior approval of the Central Government is proposed to be required before an investigation into any offence under the Act can be initiated, including by state-level agencies. [8] What it means: No investigation, including at the state level, can proceed without this central clearance, which is intended to prevent parallel or contradictory proceedings under a single central statute. [5] Example (illustrative, fictional): If a state police agency wished to investigate a hypothetical organisation for an alleged FCRA violation, it would first need to obtain Central Government approval before opening that investigation. Practical concern: While this may screen out vexatious or premature investigations, commentators have also flagged that it concentrates discretion at the centre, with the criteria for granting or refusing approval not yet spelt out in the Bill itself. [8] Section 9 Legal and constitutional concerns Legal analysis, not a judicial finding The points below reflect analytical concerns raised by independent legislative researchers and commentators. They are not findings of any court, and they should not be read as allegations against the government, any political party, or any individual. Readers should treat this as a summary of debate, not as settled legal conclusions. Consequences of renewal refusal. PRS Legislative Research has pointed out that under the Bill as introduced, non-renewal of a certificate — whether because no application was filed or because an application was refused — would trigger the same asset-vesting consequences as cancellation, even though the organisation may have committed no violation at all and may simply have chosen not to continue relying on foreign funding. [4] Absence or limitation of a specific statutory appeal mechanism. The existing Act provides a statutory appeal to the High Court against cancellation of a certificate, rejection of an application, or confiscation of currency. PRS has noted that neither the existing Act nor the Bill, as analysed, provides an equivalent, specific appeal mechanism against a refusal to renew a certificate. [4] This is separate from the revision-and-District-Judge-appeal route that the Bill proposes for challenging orders of the Designated Authority regarding vested assets [5] — the two remedies address different decisions, and it matters which one, if any, is actually available for a given grievance. Official government sources have stated that a decision not to renew remains open to challenge before the courts as a matter of general judicial review, [5] but this is a different proposition from a specific, codified statutory appeal of the kind available for cancellation. Hearing and procedural fairness concerns. PRS's analysis further observes that the existing Act provides an organisation an opportunity to be heard before its certificate is cancelled or currency is confiscated, but that neither the Act nor the Bill appears to require a similar hearing before a renewal is refused. [4] Whether this distinction survives scrutiny, and whether it is addressed through Rules or practice, remains to be seen as the Bill progresses. Proportionality of asset vesting. A recurring analytical question is whether it is proportionate for an organisation to lose assets built years earlier from foreign contribution, at a time when it may already have transitioned to relying entirely on domestic funds, simply because it chooses to exit the FCRA framework or fails to meet a renewal condition. PRS has specifically flagged that, under the Bill, there is effectively no way for an organisation to exit the FCRA framework without risking the loss of assets built from foreign contribution — it would need to keep renewing its certificate indefinitely purely to retain those assets, even if it no longer needs or wants further foreign funding. [4] Effect on mixed-funded property. As discussed in Section 5, the proposal that an entire asset vests even where it was only partly funded from foreign contribution — subject to a difficult-to-satisfy burden of showing a "distinct or ascertainable" domestic portion — raises a genuine documentation and evidentiary challenge for institutions with blended funding histories. [2] Discretion delegated to the executive. Several aspects of the proposed framework — the exact prescribed period for restoration, the criteria for choosing between public-purpose use, transfer and sale, the procedure for entrusting management of a place of worship, and the criteria for granting or refusing prior approval to investigate — are left to future rules. Commentators have noted that this concentrates significant discretion in the executive without the underlying primary legislation itself specifying detailed guardrails. [8] Public-purpose justification and organisational property rights. The Bill's framework rests on the premise that assets built from foreign contribution should ultimately serve a public purpose if the organisation that built them exits the regulatory system. This raises a genuine and legitimate governance debate about the balance between the state's interest in ensuring continued public benefit from foreign-funded infrastructure, and an organisation's own property and governance rights over assets it may have built with significant domestic effort and co-funding as well. This is a matter of ongoing public and legal debate rather than a settled constitutional question. Section 10 Practical compliance checklist Because the Bill remains pending, none of the following steps are legally mandated by the proposed provisions themselves today. They are, however, sensible preparatory measures for any NGO, trust, society or Section 8 company that currently holds — or has ever held — FCRA registration, given the direction the law appears to be heading. Calendar all renewal deadlines well in advance, with internal reminders set several months before expiry, not merely days before. Review your organisation's current registration status on the FCRA portal, including whether any renewal application is pending, overdue, or at risk of refusal. Maintain a source-wise asset register that clearly identifies which assets, or portions of assets, were funded from foreign contribution versus domestic sources. Map every property that was created partly or fully using foreign contribution, including land, buildings, vehicles, equipment and major renovations. Preserve title deeds, purchase records, tender documents and payment records for all such assets, ideally in both physical and digital form. Maintain separate donor ledgers and project-wise ledgers that make the funding trail for each asset traceable at short notice. Segregate domestic and foreign funding at the accounting level wherever the underlying activity or asset allows it. Record all board-level or governing-body decisions relating to FCRA compliance, renewal strategy, and asset management in formal minutes. Maintain a due-diligence file for each key functionary, documenting their role, oversight actions, and awareness of compliance obligations. Review suspension risks proactively, including any pending inquiries, show-cause notices, or compliance gaps that could lead to suspension or cancellation. Review existing mortgages, transfers and encumbrances on foreign-funded assets to understand how they might interact with a future vesting scenario. Document utilisation of any foreign contribution received under the prior-permission route, including receipt and utilisation dates, in anticipation of prescribed timelines. Prepare a contingency plan describing what the organisation would do — operationally and legally — in the event of cancellation, surrender, or non-renewal of its certificate. Section 11 One-snapshot summary table This table is designed to work as a standalone reference — useful if you want to screenshot or share just this section. Proposed change What it means Simple example Compliance action Deemed cessation of registration Non-renewal, whether by refusal or by not applying, is treated like a formal end of registration. A certificate lapses because renewal was filed late and denied. Track and act on renewal deadlines months in advance. Designated Authority A new central authority manages vesting, supervision and disposal of foreign-funded assets. State custodianship under the old Section 15 framework is replaced by a dedicated authority. Know who the notified Authority is once it is formally established. Provisional vesting Assets pass into the Authority's custody temporarily upon cancellation, surrender or cessation. A vested clinic continues operating under the Authority's supervision. Keep full records ready to support a quick renewal/restoration application. Permanent vesting If restoration does not happen within a prescribed period, vesting becomes final. An unrenewed certificate beyond the prescribed period leads to permanent transfer. Never treat a lapsed certificate as a low-priority issue. Mixed-funded assets vest wholly An asset built partly with domestic funds still vests entirely, absent proof of a distinct portion. A ward built with ₹60L domestic + ₹40L foreign funds vests in full unless segregation is shown. Maintain a source-wise asset register from the design stage of any project. Disposal and Consolidated Fund Sale proceeds and unutilised funds go to the Consolidated Fund of India, not back to the organisation. A permanently vested building is sold; proceeds are credited to government account. Understand this is a one-way outcome if restoration is missed. Key functionaries defined Directors, trustees, partners, Kartas and office bearers are captured by a single liability framework. A trustee may be presumed liable for an organisational offence absent due diligence. Build and preserve due-diligence files for every functionary. Reduced maximum imprisonment Maximum jail term for offences drops from five years to one year. An individual offence that once risked five years now risks at most one. Do not treat this as reduced overall risk — asset consequences remain severe. Prior approval before investigation Central Government clearance is needed before any FCRA investigation begins. A state agency must seek central approval before probing an alleged violation. Understand this affects timing of enforcement, not the underlying compliance duty. Prior-permission utilisation timelines Funds received under prior permission must be used within a prescribed period. A project grant must be spent within the notified utilisation window. Track receipt and utilisation dates closely for every prior-permission grant. Section 12 Frequently asked questions Is the FCRA Amendment Bill, 2026 already law? No. As of the date of this article, the Bill is pending before Parliament, having been introduced in Lok Sabha on 25 March 2026. [2] It has not received Presidential assent and does not form part of the operative Foreign Contribution (Regulation) Act, 2010. Its text and provisions may still change before, if, and when it is enacted. Does expiry automatically mean cancellation? No. Cancellation is a formal government order made on specified grounds, while expiry (proposed to be labelled "cessation") happens simply because a certificate was not renewed in time. The Bill proposes similar downstream asset consequences for both, but they remain legally distinct events, as explained in Section 3. Can an NGO continue receiving foreign funds after expiry? No. Once a certificate expires without renewal, the organisation cannot lawfully accept fresh foreign contribution under the existing Act, and would need to seek restoration or fresh registration in accordance with the law and Rules in force at the relevant time. What happens to unused foreign contribution? Under the Bill as proposed, unutilised foreign contribution would provisionally vest in the Designated Authority upon cancellation, surrender or cessation. If registration is renewed, restored, or freshly granted within the prescribed period, the Bill proposes that this unutilised portion be returned; otherwise, it is proposed to vest permanently and eventually be credited to the Consolidated Fund of India. Can foreign-funded property vest in an authority? Yes, in principle — this already happens under the existing Section 15 of the Act upon cancellation or surrender. The Bill proposes to formalise and expand this through the Designated Authority and to add cessation (non-renewal) as an additional trigger. What happens to partly foreign-funded assets? The Bill proposes that such assets vest in their entirety, subject to the organisation being able to apply for the return of a "distinct or ascertainable" domestically funded portion. As discussed in Section 5, demonstrating such a distinct portion can be practically difficult where funds were commingled in a single physical asset. Can the authority sell the property? Under the Bill as proposed, once vesting becomes permanent, the Designated Authority may dispose of assets by sale or other processes if they cannot be used directly for a public purpose or transferred to a government body, with proceeds credited to the Consolidated Fund of India. Are trustees and directors personally liable? The Bill proposes a rebuttable presumption of liability for defined "key functionaries," subject to a defence based on lack of knowledge or exercise of due diligence. Liability is not automatic in every instance and would depend on the specific facts and appropriate legal process. Is there an appeal against refusal of renewal? Analysts have noted that neither the existing Act nor the Bill, as currently drafted, appears to provide a specific statutory appeal against refusal to renew a certificate, as distinct from the revision-and-District-Judge appeal proposed against orders of the Designated Authority. General constitutional judicial review may remain available; organisations should seek specific legal advice on this point. What should NGOs do immediately? Even though the Bill is pending, it is prudent to calendar renewal deadlines, audit current registration status, build a source-wise asset register, preserve documentation, review governance and due-diligence records for key functionaries, and prepare a contingency plan for cancellation, surrender or non-renewal, as detailed in Section 10. Section 13 Conclusion The Bill signals a shift from regulating the receipt and use of foreign contribution to creating a detailed framework for controlling the assets created through it when registration ends. That single sentence captures the essential character of the FCRA Amendment Bill, 2026. Where the existing Act is primarily concerned with how foreign money comes in and how it is spent while a certificate remains valid, the Bill's most consequential proposals are about what happens afterwards — when a certificate is cancelled, surrendered, or simply allowed to lapse. For organisations that have built schools, clinics, community centres and places of worship over the years using foreign contribution, this shift deserves serious, calm attention, not alarm. It is worth repeating, plainly: this is a Bill , not an Act. It was introduced