Transfer of Shares
Transfer of shares between two residents (of India) involves payment of consideration (buyer to the seller) and execution of share transfer deed. Share transfer deed to be duly stamped @ 0.25% of the consideration amount. When the transaction is between a resident and a non-resident, there are regulations concerning inward and outward remittance of funds, valuation of shares and submission of form FC-TRS on RBI FIRMS portal. The Reserve Bank of India (RBI) through Notification No. FEMA 20(R) / 2017-RB dated November 07, 2017, made Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2017 to regulate investment in India by a Person Resident outside India.
Form Foreign Currency-Transfer of Shares (FC-TRS)
Form FC-TRS is required to be filed for transfer of capital instruments (Equity Shares, Fully and Compulsory Convertible Securities) of an Indian Company in the following cases:
- When the transfer is made between a person resident outside India (repatriable basis) and a person resident outside India (non-repatriable basis)
- When the transfer is made between a person resident outside India (repatriable basis) and a person resident in India.
Who is to file form FC-TRS?
Transfer of capital instruments prescribed above shall be reported on receipt of every tranche of payment. One of the important dilemma between public at large is that who has to file this form with Authorised Dealer Bank?
The onus of reporting FC-TRS shall be on the resident transferor/ transferee or the person resident outside India holding capital instruments on a non-repatriable basis, as the case may be.
What is the Time Limit for filing FC-TRS?
The form FC-TRS shall be filed with the Authorised Dealer bank within sixty days of transfer of capital instruments or receipt / remittance of funds whichever is earlier.