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FCRA AUDIT

An FCRA audit is a mandatory financial review process carried out for organizations that receive and utilize foreign contributions under the Foreign Contribution (Regulation) Act, 2010 (FCRA) in India. The audit ensures that all funds received from foreign sources are used strictly for the purposes for which they were sanctioned and that there is complete transparency and accountability in their utilization. This process helps maintain financial integrity and compliance with legal provisions designed to safeguard national interests. The FCRA audit is conducted annually by a Chartered Accountant (CA) who examines the organization’s financial statements, bank accounts, receipts, and expenditures related to foreign contributions. The auditor verifies that all transactions comply with the FCRA rules and that the funds are not misused or diverted toward activities prohibited under the Act, such as political financing, activities detrimental to national security, or purposes other than the approved projects. Organizations registered under FCRA are required to maintain a separate bank account exclusively for receiving foreign funds. The audit ensures that this requirement is followed, and that all financial transactions related to foreign contributions are properly documented and traceable. The auditor also checks whether the organization has filed its annual FCRA return (Form FC-4) within the prescribed deadline, detailing all inflows, outflows, and balances of foreign contributions.

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Description


Organizations that receive foreign contributions, such as non-profit organizations, non-governmental organizations (NGOs), societies, trusts, and other entities, are required to comply with the provisions of the FCRA. One of the compliance requirements is the annual audit of the organization's accounts related to foreign contributions.

Here's an overview of the FCRA audit: 

Mandatory Audit: Organizations registered or granted prior permission under the FCRA are required to undergo an annual audit of their accounts. This audit specifically focuses on the utilization of foreign contributions and ensures compliance with the FCRA provisions.

Chartered Accountant (CA) Audit: The FCRA audit must be conducted by a practicing Chartered Accountant (CA) in India who is qualified to undertake such audits. The CA examines the organization's financial records, transactions, and utilization of foreign contributions to ensure compliance with the FCRA provisions.

Form FC-4: After completing the audit, the organization is required to submit a report in Form FC-4 along with audited statements of accounts, including the balance sheet and income and expenditure statement, to the Ministry of Home Affairs, Government of India.

Due Date for Audit and Filing: The due date for conducting the FCRA audit and filing the annual return with the Ministry of Home Affairs varies depending on the organization's financial year. Generally, the audit must be completed and the annual return must be filed within a specified period after the end of the financial year.

Compliance and Penalties: Non-compliance with the FCRA audit requirements and other provisions of the FCRA can result in penalties, cancellation of registration or prior permission, and other legal consequences.

Overall, the FCRA audit is an essential compliance requirement for organizations receiving foreign contributions in India, ensuring transparency, accountability, and compliance with the FCRA provisions.


Frequently Asked Questions

Browse practical answers curated by our CA and CS desks for FCRA AUDIT.

Basics of FCRA Audit
Documentation & Process
Compliance & Reporting
Benefits & BizPriest Assistance

Basics of FCRA Audit

An FCRA audit is a mandatory financial review of NGOs and trusts receiving foreign contributions, ensuring that funds are received, used, and reported in accordance with the Foreign Contribution (Regulation) Act, 2010 (FCRA).

Every organisation registered under FCRA or granted prior permission to receive foreign funds must get its accounts audited annually by a Chartered Accountant (CA).

It ensures transparency in the use of foreign funds, protects your organisation’s FCRA registration, and helps maintain the trust of donors and the government.

Only a qualified Chartered Accountant registered with the Institute of Chartered Accountants of India (ICAI) is authorised to conduct and certify FCRA audits.

Documentation & Process

You’ll need your FCRA registration certificate, bank statements of the FCRA account, donor receipts, income & expenditure statements, utilisation reports, and previous audit reports.

The auditor reviews all foreign fund receipts and expenditures, verifies their lawful utilisation, ensures records are maintained as per FCRA norms, and issues a certified audit report.

Yes. BizPriest enables a fully digital process — you can upload records securely, coordinate with auditors online, and receive your report electronically.

 Generally, an FCRA audit takes 10–20 working days, depending on the complexity of transactions and the readiness of financial documents.

Compliance & Reporting

The FCRA Annual Return (Form FC-4), along with the audit report, must be submitted by 31st December for the financial year ending 31st March.

Late or missed filing can lead to penalties, suspension, or even cancellation of FCRA registration, preventing the NGO from receiving further foreign contributions.

Recent updates have tightened reporting norms, introduced stricter bank requirements, and made it mandatory to classify and disclose utilisation project-wise.

 An FCRA audit focuses solely on foreign funds, while 12A and 80G audits focus on domestic donations and general tax-exempt income.

Benefits & BizPriest Assistance

It ensures continuous eligibility for foreign donations, boosts credibility among donors, and prevents compliance-related penalties or license cancellation.

Yes. Even if no foreign contribution was received, you still need to file a ‘Nil return’ and maintain audited accounts to stay compliant.

BizPriest assists with document preparation, CA coordination, compliance checks, and final report submission — making the process smooth and hassle-free.

Because BizPriest combines expert financial knowledge, reliable CA support, digital filing tools, and end-to-end transparency — ensuring you stay fully FCRA compliant and donor-ready.

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