Transfer of shares from non resident to resident

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Abdul Latif (Querist)

18 December 2012 Dear Sir,

I have purchased 2,000 Equity Shares of Indian Private Limited Company from two Non Resident. Both are NRI but One is residing in UK and other one is in USA. UK guy is having NRO Account with HSBC in India and USA guy is having NRE Account with ICICI Bank in India. They said me to make the payment in Indian Rupee Cheque. My Queries are as follows :

1. Can i make the payment to both NRI in Indian Rupee Cheues?
2. Do I require to file FC-TRS even payment is made in Indian Rupeess.Who will sign this FC-TRS Form
3. Do I require to obtain the Fair Value certificate from CA under DCF Method ?
3. Do i need 15CA and 15 CB from Chartared Account for filing FC-TRS even payment is made in Indian Rupees.
4.How and where to file this Form FC-TRS ?

Please advise.

Arun Biyani

Arun Biyani (Expert)

18 December 2012 1. yes
2. yes, but more than that i feel you have to take the approval of FIPB also, see fdi circular 1, 2012.
3. Although in Pvt. Ltd companies, even management can decided the price, but it has to be DCF method only. better to take a certificate from CA.
4. the form FC-TRS should be submitted to the AD Category – I bank, within 60 days from the date of receipt of the amount of consideration. The onus of submission of the form FC-TRS within the given timeframe would be on the transferor / transferee, resident in India. AD Category - I bank meaning bank carrying out the transaction.
5. Form 15 CA and 15 CB is required as these forms are required for the payment to non resident, and no where it is mentioned that payment should be in foreign currency and as TDS and tax liability of Non resident is different even if he earns in rupees. but then you should ask to your bank if they can make remittance without form 15 CA and 15 CB.

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