Query on FCTRS

Form FC-TRS is strictly required for the transfer of shares via sale or gift, not for transmission by operation of law. Therefore, no FC-TRS needs to be filed on the FIRMS portal by either the company or the resident heir. The AD bank is also not involved, as there is no fund flow. To execute the transition, the resident heir simply needs to submit the valid legal succession documents and death certificate directly to the Indian company or its RTA to update the statutory registers.

Dear Sir

Thanks for your valued views.

In this regard, my query is how will then RBI know about change in status of shareholding from non resident to resident. Is this not a significant change having crucial impact.

Regards

CA CS Dipjyoti Majumdar

Dear Members

Any further thoughts on this please.

Regards

Dipjyoti Majumdar

FCTRS is generally not required for transmission by operation of law on the shareholder’s death. It is not a sale or other transfer for consideration, so the reporting obligation applicable to a transfer between a resident and a non-resident is ordinarily not triggered. The Indian company should process the transmission on receipt of the prescribed succession and shareholding documents; neither the company nor the resident heir would ordinarily file an FCTRS for the transmission.

The absence of a funds flow is consistent with transmission, but does not by itself determine reporting. If the transaction is in substance a transfer other than transmission by operation of law, the applicable FEMA reporting treatment may differ. The exact position may also depend on the shareholding instrument and the manner in which the heir succeeds to the shares.

This distinction should be captured clearly in the company’s transmission records and FEMA compliance review. Manual work on succession documents, registers and reporting checks can be difficult; automation reduces repetitive work while professional judgment remains in control. Our platform brings together 2,000+ AI agents and 650+ integrations covering only relevant workflows. For a walkthrough tailored to transmission and FEMA compliance, message us on WhatsApp at https://wa.me/message/3HVOZ7HIY4ESC1.