Exemption of CA certificate for certain FEMA remittances

GOVT has recently modified the Foreign Exchange Management (Current Account Transactions) Rules, 2000 and the Liberalized Remittance Scheme (LRS) for resident individuals for further liberalizing the existing guidelines. Accordingly, all resident individuals, including minors, are allowed to freely remit upto USD 2,50,000 (USD 1,25,000 earlier) per financial year for any permissible current or capital account transaction or a combination of both. These include the purposes of education or for maintenance of close relatives. Further, authorized dealers may allow remittances exceeding USD 250,000 based on the estimate received from the educational institution abroad or a hospital abroad. For small value remittances (upto USD 25,000), the documentation requirement is simpler and even PAN card is not insisted upon.

Currently, as per the provisions of the Income-tax Act, 1961 read with Income-tax Rules, 1962, no certificate from a Chartered Accountant is required to be obtained for certain remittances including sending money to students i.e., for remittances made under RBI's purpose Code “S0305-Travel for education (including fees, hostel expenses etc.)” and remittance towards personal gifts and donations i.e., for RBI's Purpose Code “S1302”. The complete list of payments in which no certificate from a Chartered Accountant is required to be obtained is given in explanation (2) to Rule 37BB of the Income-tax Rules, 1962.

This was stated by Mr Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Rajya Sabha on Friday.

Investment abroad by Individuals in India

A person resident in India being an Individual may acquire foreign security up to USD 2,00,000 in a financial year.

Acquisition of shares in Lieu of Professional services rendered:

A resident individual may apply  the Reserve bank of India for permission to acquire shares in a foreign entity as a consideration in lieu of the professional services rendered  to the foreign entity.

Reserve Bank of India, may grant permission after considering the following facgors

-Credentials and net worth of the Individual and the nature of his profession.

- the extent of his forex earnings / balances in his EEFC and RFC account.

- Financial and business track record of the foreign entity.

- Potential for forex inflow to the county.

- Other likely benefits to the country.

Transferable Development Rights

Transferable Development Rights (TDRs) means a certificates issued in respect of category of land acquired for public purpose either by central or state government in consideration of surrender of land by the owner without monetary compensation, which are transferable in part or whole.

The Reserve Bank of India may, in consultation with the central government, specify:-

• any class or classes of capital account transactions which are permissible
• the limit up to which foreign exchange shall be admissible for such transactions.

Foreign Investment in India by Foreigner, Non-resident Indian (NRI) and Foreign institutional investor (FII) is prohibited in "Trading in  Transferable Development Rights (TDRs)"

And also Indian parties are prohibited in for making an investment in foreign entity engaged in the business of real estate or Trading in  Transferable Development Rights (TDRs) without prior approval of Reserve Bank of India.

FEMA Guide

for corporate
http://www.corporateprofessionals.com/index.php

FEMA
http://www.femaindia.in/home

http://www.femaonline.com/

http://www.advocatekhoj.com/library/bareacts/foreignexchange/index.php?Title=Foreign%20Exchange%20Management%20Act,1999

Foreign Direct Investment by citizen or entity Incorporated in Pakistan

The Reserve bank of India has issued a circular on 22 August, 2012 regarding the Foreign direct investment(FDI) by citizen or entity incorporated in Pakistan.

Previously FDI is not allowed for citizen of Pakistan or Company incorporated in the Pakistan but RBI in a view of Globalisation has given investment entry though Approval route of the Foreign Exchange management Act, 1999 (FEMA).

 i.e a person who is a citizen of Pakistan or a entity incorporated in Pakistan may, with the prior approval of the Foreign Investment Promotion Board(FIPB) of the Government of India, purchase shares and convertible debentures of an Indian company under Foreign Direct Investment Scheme.

However receiving foreign direct investment is not permitted in the prohibited sectors, shall not engage in sectors / activities pertaining to defence, space and atomic energy and sectors / activities prohibited for foreign investment.

HERE YOU CAN FIND THE RBI CIRCULAR:

http://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7520&Mode=0