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The Institute of Chartered Accountants of India

The Institute of Chartered Accountants of India. WEBCAST on Overview of FEMA  Residential Status Capital and Current Account Transactions Inbound Investments. by. Dr DILIP K SHETH and Mr DHISHAT B MEHTA 24 January 2014. Synopsis. Overview of FEMA Residential status

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The Institute of Chartered Accountants of India

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  1. The Institute of Chartered Accountants of India WEBCAST on Overview of FEMA  Residential Status Capital and Current Account Transactions Inbound Investments by Dr DILIP K SHETH and Mr DHISHAT B MEHTA 24 January 2014

  2. Synopsis • Overview of FEMA • Residential status • Capital and current account transactions • Inbound investments • Compounding • Summing up

  3. Person • Definition • Section 2 (u) of FEMA “person” includes – (i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) every artificial juridical person, not falling within any of the preceding sub-clauses, and (vii) any agency, office or branch owned or controlled by such person.

  4. Person Resident in India • Definition • Section 2 (v) of FEMA “Person resident in India” means - (i) a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include;- (A) a person who has gone out of India or who stays outside India, in either case- (a) for or on taking up employment outside India, or (b) for carrying on outside India a business or vocation outside India, or (c) for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period; (B) a person who has come to or stays in India, in either case, otherwise than- (a) for or on taking up employment in India, or (b) for carrying on in India a business or vocation in India, or (c) for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period; (ii) any person or body corporate registered or incorporated in India, (iii) an office, branch or agencyin Indiaowned or controlled by a person resident outside India, (iv) an office, branch or agencyoutside Indiaowned or controlled by a person resident in India;

  5. Person Resident Outside India • Definition • Section 2 (w) of FEMA “Person resident outside India” means a person who is not resident in India;

  6. Non-Resident Indian (NRI) FEMA: 5 Deposits FEMA : 13 Remittance of Assets FEMA - 20 Inbound Investment Non-Resident Indian Citizen FEMA - 24 Investment in Firm or Property Concern Non-Resident Indian Citizen PIO Disqualified Persons Qualified Persons • Indian Passport-holder • Indian Citizen • Father - Indian Citizen • Mother - Indian Citizen • Grandpa - Indian Citizen • Grandama - Indian Citizen • Spouse of Indian Passport-holder • Spouse of Indian Citizen • Spouse of (Citizen) - Mother • Spouse of (Citizen) - Father • Spouse of (Citizen) - Grandpa • Spouse of (Citizen) - Grandma Citizens of Pakistan Bangladesh

  7. Personof Indian Origin(PIO) FEMA: 5 Deposit FEMA - 21 Acquisitoin and Transfer of Immovable Property in India FEMA : 13 Remittance of Assets FEMA - 24 Investment in firm or Proprietory Disqualified Persons Qualified Persons FDI Policy Citizens of • Indian Passport - holder • Indian Citizen • Father - Indian Citizen • Grandpa - Indian Citizen Disqualified Persons Qualified Persons • Pakistan • Bangladesh • Srilanka • Afghanistan • China • Iran • Nepal • Bhutan Citizens of • Indian Passport-holder • Indian Citizen • Father - Indian Citizen • Mother - Indian Citizen • Grandpa - Indian Citizen • Grandama - Indian Citizen • Spouse of Indian Passport-holder • Spouse of Indian Citizen • Spouse of (Citizen) - Mother • Spouse of (Citizen) - Father • Spouse of (Citizen) - Grandpa • Spouse of (Citizen) - Grandma Pakistan Bangladesh

  8. Capital Account Transactions • Definition • Section 2 (e) of FEMA “capital account transaction" means a transaction which alters the assets or liabilities, including contingent liabilities, outside India of persons resident in India or assets or liabilities in India of persons resident outside India, and includes transactions referred to in subsection (3) of section 6.

  9. Current Account Transactions [1] • Definition • Section 2 (j) of FEMA “current account transaction" means a transaction other than a capital account transactionand without prejudice to the generality of the foregoing such transaction includes – (i) payments due in connection withforeign trade, other current business, services, and short-term banking and credit facilities in the ordinary course of business,

  10. Current Account Transactions [2] (ii) payments due as interest on loans and as net income from investments, (iii) remittances for living expenses of parents, spouse and children residing abroad, and (iv) expenses in connection with foreign travel, education and medical care of parents, spouse and children.

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