Is there any restrictions on transfer of funds to other organisations?

Yes. Section 7 of FCRA, 2010 states:-

“No person who –

(a) is registered and granted a certificate or has obtained prior permission under this Act; and

(b) receives any foreign contribution,

shall transfer such foreign contribution to any other person unless such other person is also registered and had been granted the certificate or obtained the prior permission under this Act:

Provided that such person may transfer, with the prior approval of the Central Government, a part of such foreign contribution to any other person who has not been granted a certificate or obtained permission under this Act in accordance with the rules made by the Central Government.”

It may further be noted that Rule 24 of FCRR, 2011 prescribes the procedure for transferring foreign contribution as under:

"Rule 24:- “Procedure for transferring foreign contribution to other registered or unregistered persons:-

(1)    Any person intending to transfer the foreign contribution may make an application to the Central Government in Form FC-10. http://mha.nic.in/fcra/forms/fc-10.pdf

(2)    The Central Government may permit the transfer in respect of a person who has been granted the certificate of registration or prior permission under section 11 of the Act, in case the recipient person has not been proceeded against under any provision of the Act.

(3)    Any transfer of foreign contribution shall be reflected in the returns in Form FC-6 http://mha.nic.in/fcra/forms/fc-6.pdf as well as in Form FC-10http://mha.nic.in/fcra/forms/fc-4.pdf by the transferor and the recipient.

(4)    In case the foreign contribution is proposed to be transferred to a person who has not been granted a certificate of registration or prior permission by the Central Government, the person concerned may apply for permission to the Central Government to transfer a part of the foreign contribution, not exceeding ten per cent, of the total value of the foreign contribution received. The application shall be countersigned by the District Magistrate having jurisdiction in the place where the transferred funds are sought to be utilized. The District Magistrate concerned shall take an appropriate decision in the matter within sixty days of the receipt of such request from the person. The donor shall not transfer any foreign contribution until the Central Government has approved the transfer."