Querry on transfer of shares

The term ‘transfer’ is defined under FEMA as including "sale, purchase, acquisition, mortgage, pledge, gift, loan or any other form of transfer of right, possession or lien” {Section 2 (ze) of FEMA, 1999}.

Transfer of shares/ fully and mandatorily convertible debentures by way of Gift :

A person resident outside India can freely transfer shares/ fully and mandatorily convertible debentures by way of gift to a person resident in India as under :

• Any person resident outside India, (not being a NRI or an erstwhile OCB), can transfer by way of gift the shares/ fully and mandatorily convertible debentures to any person resident outside India;

• a NRI may transfer by way of gift, the shares/convertible debentures held by him to another NRI only,  provided that the person to whom the shares are being transferred has obtained prior permission of the Central Government to acquire the shares if he has previous venture or tie up in India through investment in shares or debentures or a technical collaboration or a trade mark agreement or investment by whatever name called in the same field or allied field in which the Indian company whose shares are being transferred is engaged.

• Any person resident outside India may transfer share/ fully and mandatorily convertible debentures to a person resident in India by way of gift.

thus, if transfer comprises of gift as well, the consideration will have to be recorded any way.

Regards

For transfer of shares, either from foreign entity to indian or vice versa, Form FCTRS is to be filled and filed with AD Bank.

Regarding stamping, i think stamping shud b according to the value of gift.

Transfer has to be recorded in Form FC TRS only in cases of transfer of consideration from Foreign entity to indian entity.

for other way around: Form FC GPR is perused.

Further, Share transfer forms need to be filled for the share tranfer; on which duty leviable for all states is 0.25% of the consideration.

and Forms have to be submitted to the Authorised Designated Banks for approval and obtaining UID from the RBI.