In literal meaning, FC-TRS stands for Foreign Currency Transfer. It is a form issued by RBI under Foreign Exchange Management Act,1999.
Whenever any transfer of shares takes place between a resident and a non-resident, the resident individual or entity has to report the transaction to RBI by filing of Form FC-TRS.
The reporting of Form FC-TRS should be done within a period of 60 (Sixty) days from the date of receiving the money.
Transactions for Which form FC-TRS needs to be filed:
FC-TRS to be filed for the following transactions
- To report transfer of capital instruments
- From a person resident outside India holding such capital instruments on repatriable basis to a person resident outside India holding such capital Instruments on a non-repatriable basis.
- From a person resident outside India holding such capital instruments on a repatriable basis to a person resident in India.
- Buy back of shares pursuant to a scheme of merger / demerger / amalgamation of Indian Companies approved by National Company Law Tribunal.
Note: Transfer of capital instruments by way of sale by a person resident outside India holding such instruments on a non-repatriable basis to a person resident in India is not required to be reported in form FC-TRS.
An entity will be considered non-compliant under FEMA, if it does not comply with the SMF filing procedure for filing of Form FC-TRS set out under the SMF Manual, or does not enter the relevant details in the EMF, or enters the details in the EMF without stating a plausible reason for the delay. In any one of these cases, the Indian entity will not be able to receive foreign investment, including indirect foreign investment.
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