transfer of shares between non residents

Transfer By

NRI to NRI-- No aproval /intimation

(PROI)Person resident out of India(Not being a NRI/OCB)  To  PROI/ NRI---No approval / intimation

NRI/OCB To PROI--Approval Not required if the total holding by PROI does not exceed the sectorial cap as per FDI.However reporting is must to RBI as per FEMA regulation/Transfer or issue of share by a person Resident Out of India.  NRI ( Indian origin) or an OCB ( Oversease corporate body of which at least 60% shareholder are such NRI/Indian origin).understand the defination & defference between NR ,NRI & OCB.

However the transaction may fall in the ambit of Tax law since the assets is situated in India.Valuation of share will be done strictly as per earstwhile CCI gudelines with joint reference to Company law for issue of share in discount/premium.

The valuation of shares in Indian Compnay shall be needed to done in accordance with rule 11UA of Income Tax Rules so that provisions of section 56(2)(vii) are satisfied/not invoked.

Anuj

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