fema
This query is : Open
03 July 2016
meaning of depreciation of direct investment in ordinary course of business in sec. 6 (2) of fema
03 July 2016
As per section 6(2)(b), RBI shall not impose any restriction on the drawal of foreign exchange for payments due on account of depreciation of direct investments in the ordinary course of business. That is an Indian company can draw foreign exchange on account of recapitalisation of foreign investment. For eg. if an Indian company has wholly owned subsidiary company in country A which requires minimum net worth of '10' and due to loss of '2' it is reduced to '8', the holding Indian company can draw '2' as recapitalisation by way of foreign exchange drawal.
Message likes :
1 times
03 July 2016
can u elborate the term direct investment for this particular sec.
03 July 2016
Direct investment is nothing but FDI( Foreign Direct Investment), simply it is investment in a foreign business enterprise with a view to acquiring controlling interest. The definition is much more elaborative as :
Direct investment outside India means investments, either under the Automatic Route or the Approval Route, by way of contribution to the capital or subscription to the Memorandum of a foreign entity or by way of purchase of existing shares of a foreign entity either by market purchase or private placement or through stock exchange, signifying a long-term interest in the foreign entity.
This is different from portfolio investment.
03 July 2016
following eg. also fits in for this sec. or not
if a PRI invested in shares of foriegn entity n at dt tm the shares were partly paid and after some time call is made by the co. but now RBI has restricted the drawl of foriegn exchng for invst. in shares and this will lead to depreciation of our asset ( share) . so RBI can not restrict the drawl for such partly paid shares
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS on Consultancy- Non DTAA
- Depreciation of fixed assets- coop housing society in mumbai
- Reopen of assessment proceeding
- EXPORT BILL UNDER LUT FREIGHT CHARGE INCLUED IN INVOICE IT LIABLE TO TAX
- Gift Received from nonblood relative
- COMMERCIAL INVOICE FOR MATERIAL AND FREIGHT
- Reprocessing of rectification order AY 2025-26
- FTS Taxable under 115A
- Rental income gst and it purpose
- Tax Audit u/s 44AB for Transport Business A proprietorship is engaged in transportation business and
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
