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New Compounding Provisions for Foreign Contribution Offenses

Compounding provisions under Foreign Contribution (Regulation) Act, 2010 amended w.e.f. 01.07.2022 – 5 new offences now made compoundable


The Foreign Contribution (Regulation) Act, 2010 (“FCRA”) regulates foreign donations/contributions coming into India by regulating the acceptance and use of foreign contributions or foreign hospitality by certain individuals, associations and companies. FCRA is a stringent law and non-compliance with the provisions of FCRA can lead to prosecution.

However, certain offences can be compounded u/s 41 of FCRA before the initiation of prosecution. The list of offences which can be compounded u/s 41 is notified by the Central Government by way of notifications issued from time to time. W.e.f. 01.07.022, 5 new offences under FCRA have now been made compoundable. This update captures the legal position regarding the compoundable offences under FCRA both prior to and post 01.07.2022.

Legal position up to 01.07.2022:

The table below captures the offences under FCRA which were compoundable till 30.06.2022.

Legal Position w.e.f. 01.07.2022:

The Central Government has now issued vide MHA Notification No. S.O. 3025 (E) dated 01.07.2022, adding 5 new offences under FCRA which can now be compounded. The table below captures the new compoundable offences under FCRA:

Noteworthy points:

1. The officer competent to compound the above offences is the Director, or the Deputy Secretary in charge of the section responsible for the administration of FCRA. The applications can be filed electronically as well as physically with the concerned officer.

2. For the purpose of compounding, the person shall have to pay the amount of penalty mentioned in the above tables. However, it is provided that the amount of the compounding fee shall not exceed the foreign contribution received by the person.


The above amendments to the compounding provisions under FEMA will provide significant relief to persons in the non-profit sector receiving foreign contributions and help them avoid litigation in cases of genuine and inadvertent reporting lapses. The amendments will significantly reduce litigations for minor infractions of FCRA.

Authored by Aishwarya Pawar, Advocate at Metalegal Advocates. The views are personal and do not constitute legal opinion.


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