355 lines
17 KiB
PHP
355 lines
17 KiB
PHP
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@extends('Frontend.layouts.master')
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@section('content')
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<!--add html content-->
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<div class="inner-banner">
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<div class="container">
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<div class="banner-content">
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<div>
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<h2>Blogs</h2>
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<!--<p>India’s First Secondary Transactions<br> Platform for Alternative Assets. </p>-->
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</div>
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<img src="{{imagePath('public/assets/media/FrontendImages/menu-logo.png')}}">
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</div>
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</div>
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</div>
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<div class="blog-container">
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<div class="container">
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<h4 class="fw-semibold">Investments in Global Assets – Guide for Resident Individuals</h4>
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<h5 class="fw-semibold">International Investing</h5>
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<p>
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International investing means holding securities issued by companies or governments outside
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an investor's home country. It is an investment strategy that involves selecting global investment
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instruments as part of an investment portfolio.
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An investor can look to the same types of investment options internationally that they have
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domestically, including variations of
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stocks,
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bonds, and
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mutual funds.
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</p>
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<p class="mb-1">
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There are two ways for international markets:
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</p>
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<ul class="mb-3">
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<li class="mb-1">
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Invest directly in the stock market of your preferred company.
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</li>
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<li class="mb-1">
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Invest in Indian mutual funds that invest in global equity.
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</li>
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</ul>
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<p>
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Through global investment, portfolios are more diversified and may enhance returns and reduce
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portfolio risk. Although, it is advisable to study the economic condition, political stability, and
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the market of the country you want to invest in.
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</p>
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<h5 class="fw-semibold">Benefits of Investing Globally</h5>
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<ul class="mb-3">
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<li class="mb-1">
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<strong>Investment Diversification: </strong>
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You significantly reduce your risk by parking your money
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in
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different
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investment
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vehicles
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across
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geographies.
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As
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the
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correlation
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between
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geographies is usually low, even if one country faces an economic slowdown, it’ll only
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have a limited impact on your portfolio. Diversification also provides stability to your
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portfolio by guarding it against market volatility.
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</li>
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<li class="mb-1">
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<strong>Multiple investment options:</strong>
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With
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global market investing, your investment options
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are not only limited to your country. You can invest in financial instruments that are not
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available in India and enjoy high returns. You can also invest in international stocks of
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different
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sectors.
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Moreover,
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you
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can
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invest
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in
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multiple
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countries
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through
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ETFs.
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International investing enables you to invest in industry giants across the world.
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</li>
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<li class="mb-1">
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<strong>Currency appreciation: </strong>
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You benefit from international investment not only in terms of
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profit on the investment but also in the form of currency fluctuation. For instance,
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suppose you purchased a US stock for Rs. 7 lakhs when the rupee was trading at Rs.
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70/$. Now, you decided to sell this stock when its value became Rs. 8 lakhs. At the same
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time, the value of the dollar appreciated and the value of the rupee became Rs. 75/$.
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Hence, in addition to the gain of Rs. 1 lakh on your investment, you also gain from the
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appreciation of the dollar.
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</li>
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<li class="mb-1">
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<strong>Investment Protection against Fraud:</strong>
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Another significant benefit of global investing is
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the
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protection
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of
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investments
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against
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fraud
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and
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liquidations.
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Developed
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market
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companies generally have strong regulations that ensure sound corporate governance
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and severe penalties for market abuse. This protects retail investors from potential
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scams and insider trading losses.
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</li>
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<li class="mb-1">
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<strong>Building up a foreign currency corpus:</strong>
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If you’re looking at saving up global currency
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like US Dollars for your children’s education, foreign travel or other offshore investments
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including but not limited to real estate,
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global investing
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helps you create that corpus in
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the foreign currency and grow it efficiently.
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</li>
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<li class="mb-1">
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<strong>Participate in the global growth story:</strong>
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With access to international markets, you have
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the option of investing into the leaders & innovators across the globe. This helps you
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participate in the growth story of other leading economies – e.g. the US is home to large
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giants like Meta, Amazon, Apple, Alphabet. To simply gauge the size of the US market
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which is the world’s largest stock market – US stock market is almost 16x of the Indian
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stock market. Furthermore, there are certain themes like Artificial Intelligence, semi-
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conductor and precious metal mining, etc. which are not available in markets like India
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but can be accessed through others.
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</li>
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</ul>
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<h5 class="fw-semibold">Investment Options in International Market for Resident Individual</h5>
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<ul class="mb-3">
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<li class="mb-1">Acquisition of Immovable Property</li>
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<li class="mb-1">Investment in equity shares of foreign entities</li>
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<li class="mb-1">Investment in International mutual funds or Exchange-traded Funds</li>
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<li class="mb-1">Investment in listed debt instruments</li>
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<li class="mb-1">Depositary Receipts</li>
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<li class="mb-1">Acquisition of foreign securities by way of inheritance/ gift</li>
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<li>Investment in entities located in IFSC (GIFT City in Gujarat)</li>
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</ul>
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<h5 class="fw-semibold">Liberalised Remittance Scheme</h5>
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<p>
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Under the Liberalised Remittance Scheme, all resident individuals, including minors, are
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allowed to freely remit up to USD 2,50,000 or its equivalent in any freely convertible foreign
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currency per financial year (April – March) for any permissible current or capital account
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transaction or a combination of both.
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</p>
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<h5 class="fw-semibold">Capital Account Transactions</h5>
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<p class="mb-1">A transaction which alters assets or liabilities including contingent liability</p>
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<ul class="mb-3">
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<li class="mb-1">Opening, holding, maintaining a foreign currency account abroad with a bank</li>
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<li class="mb-1">Purchase of property abroad.</li>
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<li class="mb-1">Making foreign investments in equity shares, debt instruments, mutual funds, venture capital funds, etc.</li>
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<li class="mb-1">Extending loans to Non-Resident Indians who are relatives as defined under the Companies' Act</li>
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<li class="mb-1">Setting up a Wholly Owned subsidiary (WOS) or a Joint Venture (JV) outside India forany bonafide business purpose subject to the rules framed under the Overseas Direct Investments (ODI) regulations</li>
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</ul>
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<h5 class="fw-semibold">Current Account Transactions</h5>
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<ul class="mb-3">
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<li class="mb-1">Travel and tourism to foreign countries (except Nepal and Bhutan)</li>
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<li class="mb-1">Gift or donations to legitimate beneficiaries</li>
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<li class="mb-1">Going abroad for employment</li>
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<li class="mb-1">Emigration</li>
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<li class="mb-1">Maintenance of close relatives living abroad</li>
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<li class="mb-1">Business trips</li>
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<li class="mb-1">Expenses in connection with medical treatment abroad</li>
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<li class="mb-1">Paying for education abroad</li>
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<li class="mb-1">Any other current account transaction that is not covered under FEMA.</li>
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</ul>
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<h5 class="fw-semibold">Importance of LRS Scheme</h5>
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<p>
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It eases the process of transferring money. LRS provides an extensive and structured system to
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remit funds without the hassle of too many protocols and paperwork.
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</p>
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<h5 class="fw-semibold">Key Features of LRS Scheme</h5>
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<ul class="mb-3">
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<li class="mb-1">
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The overseas investment by an Indian resident must be within the overall ceiling of the
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LRS for permissible investments (OPI and ODI route) and other purposes such as private
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visits
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outside
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India,
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gift
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or
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donations,
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maintenance
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of
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relatives
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abroad,
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medical
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treatment abroad, education abroad, etc.
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</li>
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<li class="mb-1">
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Once a remittance is made for an amount up to USD 2,50,000 during the financial year, a
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resident individual would not be eligible to make any further remittances under this
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scheme, even if the proceeds of the investments have been brought back into the
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country. Any Remittance exceed this limit would require prior permission from the RBI.
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</li>
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<li class="mb-1">
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Remittances under the facility can be consolidated in respect of close family members
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subject to the individual family members complying with the terms and conditions of
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the scheme. Clubbing is not permitted by other family members for capital account
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transactions such as opening a bank account/investment/purchase of property, if they
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are not the co-owners/co-partner of the overseas bank account/investment/property.
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</li>
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<li class="mb-1">
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In case of remitter being a minor, the LRS declaration form must be countersigned by the minor’s natural guardian.
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</li>
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<li class="mb-1">
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For LRS individual applicant needs to furnish an application cum declaration in the
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prescribed Form A2 to the Authorised Dealer (AD)/Full Fledged Money Changer
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(FFMC). The Authorised dealer is responsible to carry out further due diligence.
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</li>
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</ul>
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<h5 class="fw-semibold">Exceptions under LRS Scheme</h5>
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<ul class="mb-3">
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<li class="mb-1">
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Individuals may avail the exchange facility for an amount in excess of the limit
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prescribed under the Liberalised Remittance Scheme if it is required by the country of
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emigration, medical institute offering the treatment or the university, respectively.
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</li>
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<li class="mb-1">
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Resident Individuals (who are not permanently residents in India) can remit up to net
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salary (after deduction of taxes, contribution to provident fund and other deductions).
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Also, if they wish to remit any other income apart from their salary, they may approach
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RBI
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with
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all
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the
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relevant
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documents
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through
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their
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Authorised
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Dealer
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Bank
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for
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consideration.
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</li>
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</ul>
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<h5 class="fw-semibold">Transactions prohibited under the LRS Scheme</h5>
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<ul class="mb-3">
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<li class="mb-1">
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Remittance for any purpose specifically prohibited under Schedule-I (like purchase of
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lottery tickets/sweep stakes, proscribed magazines, etc.) or any item restricted under
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Schedule II of Foreign Exchange Management (Current Account Transactions) Rules,
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2000.
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</li>
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<li class="mb-1">
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Remittance from India for margins or margin calls to overseas exchanges / overseascounterparty.
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</li>
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<li class="mb-1">
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Remittances for
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purchase
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of
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FCCBs
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issued
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by Indian companies
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in the
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overseas
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secondary market.
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</li>
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<li class="mb-1">Remittance for trading in foreign exchange abroad.</li>
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<li class="mb-1">
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Capital
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account
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remittances,
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directly
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or
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indirectly,
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to
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countries
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identified
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by
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the
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Financial Action Task Force (FATF) as “non- cooperative countries and territories”, from
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time to time.
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As of now,
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Iran, North Korea and Myanmar
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are the three black listed
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countries.
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</li>
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<li class="mb-1">
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Remittances directly or indirectly to those individuals and entities identified as posing
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significant risk of committing acts of terrorism as advised separately by the Reserve
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Bank to the banks.
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</li>
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</ul>
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<h5 class="fw-semibold">Taxation</h5>
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<ul class="mb-3">
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<li class="mb-1">
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Resident and ordinarily resident Indians have to pay tax even on income earned through
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foreign assets that they own in other countries. It will form part of their total income in
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India. This includes gains made on sale of such assets.
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</li>
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<li class="mb-1">
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The sale of foreign assets would be taxed as per the provisions of Capital Gains and the
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income generated on such foreign investments would be included under Income from
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other sources head.
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</li>
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<li class="mb-1">
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For instance, gains on sale of
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foreign stocks
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held for more than 24 months attract a long-
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term capital gains tax of 20 percent plus cess and surcharge wherever applicable. Profits
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from sale of short-term
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holdings (held for less than 24 months) will be taxed at the slab
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rates applicable to you.
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</li>
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<li class="mb-1">
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The tax department requires such taxpayers to furnish details like country where these assets are held, income generated by the asset, nature of ownership, and so on.
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</li>
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<li class="mb-1">
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The details of foreign assets are to be reported in income tax return (ITR) form
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(Schedule FA).
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</li>
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<li class="mb-1">In case of double taxation Foreign Tax Credit can be claimed (Form 67)</li>
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<li class="mb-1">
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Tax is collected at source by authorized dealer at 20%
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for purposes other than that of
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medical or education.
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This means that 20% of the total amount of transfer will be
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withheld by the bank and deposited in transferer’s name to the government. Although,
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TCS credit can be claimed for the same at the time of filing of Income tax returns it will
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lead to additional capital being blocked for the intermediate period between actual
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remittance and receipt of Income tax refunds.
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</li>
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</ul>
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</div>
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</div>
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@endsection
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