Section 38 of FCRA 2010: Prohibition on Acceptance of Foreign Contribution
Section 38 of the Foreign Contribution (Regulation) Act, 2010 creates a five-year statutory bar on accepting foreign contribution when a person is convicted again for a specified offence relating to the acceptance or utilisation of foreign contribution.
Prohibition of acceptance of foreign contribution. Notwithstanding anything contained in this Act, whoever, having been convicted of any offence under section 35 or section 37, in so far as such offence relates to the acceptance or utilisation of foreign contribution, is again convicted of such offence shall not accept any foreign contribution for a period of five years from the date of the subsequent conviction.
What Section 38 means
Section 38 is a repeat-offence provision. It does not impose the five-year prohibition merely because there has been one conviction. The statutory bar arises where a person who has already been convicted of an offence under Section 35 or Section 37, concerning acceptance or utilisation of foreign contribution, is subsequently convicted again of such an offence.
The words "notwithstanding anything contained in this Act" give Section 38 overriding operation within the FCRA. Once its conditions are satisfied, the person cannot accept foreign contribution for five years from the date of the subsequent conviction.
Conditions for the five-year prohibition
- There must be an earlier conviction under Section 35 or Section 37.
- The relevant offence must relate to the acceptance or utilisation of foreign contribution.
- The person must be again convicted of such an offence.
- The prohibition runs for five years from the date of the subsequent conviction.
- During that period, the person shall not accept any foreign contribution.
Related provisions: Sections 35 and 37
Section 35 - punishment for contravention
Section 35 provides punishment for accepting, assisting in accepting, or accepting on behalf of a political party, organisation or person any foreign contribution or foreign hospitality in contravention of the Act, and for specified assistance in contravention of the Act. Section 38 applies only to the extent the relevant conviction concerns acceptance or utilisation of foreign contribution.
Section 37 - residual penalty
Section 37 is the residual penal provision. It applies where a person fails to comply with a provision of the FCRA for which the Act does not provide a separate penalty. A repeat conviction under Section 37 can engage Section 38 when the offence relates to acceptance or utilisation of foreign contribution.
Meaning of foreign contribution
For FCRA purposes, foreign contribution is defined in Section 2(1)(h). Broadly, it covers a donation, delivery or transfer made by a foreign source of an article (subject to the statutory value exception for personal gifts), currency whether Indian or foreign, or a foreign or Indian security. The statutory definition and its explanations should be read for the complete scope.
Because Section 38 prohibits acceptance of any foreign contribution during the five-year period, the definition in Section 2 is important when determining whether a proposed receipt falls within the prohibition.
When does the five-year period begin?
The Act expressly measures the period from the date of the subsequent conviction. The text of Section 38 does not state that the five-year period begins from the earlier conviction, from registration cancellation, or from a later administrative order.
Practical compliance point
A person or association dealing with a conviction connected with foreign contribution should examine the precise offence, the conviction history and the date of the subsequent conviction before accepting further foreign contribution. Section 38 operates alongside the other registration, prior-permission, suspension, cancellation, banking, reporting and penal provisions of the FCRA.
Reviewed for statutory accuracy: September 2026.