Fema - classification of transaction
Dhruv
(Querist) 20 February 2012
This query is : Resolved
Dear All,
I have a doubt regarding the classification of the undernoted transaction as a Capital or a Current Account Transaction.
A resident Indian expired leaving behind a house property in legacy. An Estate of the deceased was formed whose all -3- beneficiaries are all NRIs but the executor is an Indian resident. Now the house property is sold with vendors being the Estate and -2- beneficiaries (the third beneficiary could not be present in India) and separate bank accounts were opened in India of the -2- beneficiaries and of the Estate. Now the funds are to be remitted abroad. How will the transaction be classified as when
a) The beneficiaries remit the funds from their accounts in India to their accounts abroad? And
b) The Estate remits funds from its account in India to the beneficiaries abroad?
Kindly help.
A V Vishal
(Expert) 20 February 2012
You attract "Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000". Further the persons cannot remit the proceeds outside India without paying the taxes and acquiring a certificate from a C.A.
Dhruv
(Querist) 20 February 2012
Thank you Sir for your valuable inputs.
I understand that the remittance of sale proceeds by the -2- beneficiaries from their accounts in India to their accounts abroad will attract "Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000" (Schedule II transaction). However is this also the case where the Estate (which is a resident person) remits the sale proceeds (legacy amount) to its non - resident beneficiaries?
Dhruv
(Querist) 21 February 2012
Thankyou Sir.
