Private Placement_NRE Account

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A company received funds from an NRE account for NCCPS but faced RBI guideline issues. They now want to issue NCCPS to the investor's daughter, treating the original amount as a gift. The discussion clarifies that while the funds can be gifted to the daughter, if the company issues NCCPS to her, the amount must be received directly from her account. It also confirms that refunds can be made to an NRO account.

Meenakshi Ramandasani

Meenakshi Ramandasani (Querist)

24 April 2023 A company have received amount from Mr. A's NRE Account and wants to issue NCCPS in lieu of this amount but could not issue the NCCPS due to some RBI guidelines. Now He wants that company will issue NCCPS in favour of his daughter who is already a shareholder of the Company. And that amount shown as gift given by father to his daughter.

Is it possible for company ??

or if company wants to refund the same then can company will refund that amount to his Residential account other than NRE Account ???

Kindly resolve the query as earliest.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

24 April 2023 Yes, it can be refunded to the NRO account

Meenakshi Ramandasani

Meenakshi Ramandasani (Querist)

02 June 2023 Can Mr. A gift that amount to his daughter ??
And If company wants to issue NCCPS to Mr. A's daughter then that amount must be received from his daughter's account..right ??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

02 June 2023 Yes, it can be gifted.
Yes you are right.

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