Form FC-TRS

Form Foreign Currency-Transfer of Shares

What is Form FC-TRS?

Form FC-TRS is filed for transfer of equity instruments between:

  • a person resident outside India holding equity instruments in an Indian company on a repatriable basis and person resident outside India holding equity instruments on a non-repatriable basis; and
  • a person resident outside India holding equity instruments in an Indian company on a repatriable basis and a person resident in India

Regulations/Master Directions Applicable:

  • Foreign Exchange Management Act, 1999 
  • Master Direction – Foreign Investment in India
  • Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019
  • Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017

Who is required to file Form FC-TRS?

The resident transferor / transferee or the person resident outside India holding equity instruments on a non-repatriable basis, as the case may be.

Which transactions to be reported in Form FC-TRS:

  1. Transfer of equity instruments on a recognised stock exchange by a person resident outside India 
  2. Transfer of equity instruments prescribed in Rule 9(6) of the Rules, on receipt of every tranche of payment.
  3. Transfer of ‘participating interest / rights’ in oil fields 

Transactions not to be reported in Form FC-TRS:

Transfer of equity instruments in accordance with the rules by way of sale between a person resident outside India holding equity instruments on a non-repatriable basis and person resident in India.

Due date of filing:

The form FC-TRS shall be filed within sixty (60) days of transfer of equity instruments or receipt / remittance of funds whichever is earlier.

Form FC- TRS Filing Process:

FIRMS is an online portal for reporting of foreign investment into India. It facilitates filing of Single Master Form (SMF) which provides for the reporting of 9 forms for foreign investment viz., FC-GPR, FC-TRS, LLP-I, LLP-II, CN, DRR, ESOP, DI and InVi. For filing of Form FC-TRS, following steps need to be taken:

  1. Business User Registration (BU) – A BU is an applicant who reports the transaction in Single Master Form in FIRMS. A BU can use his login credentials only for the entity that has authorized him/her to report the transactions 
  2. e-KYC – Every business user has to be e-KYC verified before any reporting can be made in the Single Master Form 
  3. Know Your Customer (KYC) – For the remittance received from the non-resident investor, the KYC of the same is to be provided along with the forms in SMF as and where applicable and indicated. 
  4.  Logging into SMF at FIRMS Portal – Login into SMF and reach your workspace and select Form FC-TRS and click on Add New Return. The user will be taken to form FC-TRS.
  5. The complete form is arranged into two parts, Common Investment details and “Form FC-TRS” which is further arranged into 3/4 tabs – particulars of transfer, remittance details, shareholding pattern.
  6. Click on save and submit for submitting the form.

List of documents to be submitted along with Form FC- TRS:

(A) For Transfer by way of Gift: 

  1. Relevant regulatory approvals, wherever applicable, to be attached as “other attachment”. 
  2. Consent letter: Consent letter between donor and donee for the transfer to be attached as other attachment. 
  3. Non-resident declaration: As per the format provided in FIRMS User Manual, to be attached as “other attachments” 
  4. Acknowledgement letter of initial allotment, if any. 

(B) For transfer by way of sale (Private Arrangement)

  1. Share Transfer agreement/SH-4: Relevant extracts of the transfer agreement (or SH-4) along with the consent letter between buyer and seller. 
  2. Valuation Certificate: valuation certificate as per provisions under FEMA or the rules and regulations framed, or directions issued thereunder as amended from time to time and as applicable to be attached at “Transfer agreement/ Valuation certificate”. The valuation certificate shall not be more than 90 days old as on the date of share transfer. 
  3. Non-resident declaration: As per the format provided in FIRMS User Manual, to be attached as “other attachments” 
  4. In case of sale by a non-resident, acknowledgement of FC-TRS as applicable for the Equity instruments being sold, to be attached as “other attachment”. 
  5. FIRC /Outward remittance certificate and KYC to be attached at the specified attachment. 

(C) For transfer by way of sale (On Stock Exchange): 

  1. For sale/ purchase on stock exchange, the contract note may be attached at “Transfer agreement/ Valuation certificate”. 
  2. Broker’s Note – Date of trade/settlement, No. of shares transferred, Name of Investee Company, Consideration amount should be checked. 
  3. NR declaration as per the format provided in FIRMS User Manual
  4. Outward Remittance Certificate. 
  5. Copy of acknowledgement of FC-GPR/ FC-TRS as applicable for the Equity instruments being sold, to be attached as “other attachment”. 

Late Submission Fee (LSF) Matrix for Reporting Delays, wherever applicable:

Notes: 

  1. “n” is the number of years of delay in submission rounded-upwards to the nearest month and expressed up to 2 decimal points. 
  2. “A” is the amount involved in the delayed reporting.
  3. LSF amount is per return.
  4. Maximum LSF amount will be limited to 100 per cent of ‘A’ and will be rounded upwards to the nearest hundred.
  5. In case a person responsible for any submission or filing under the provisions of FEMA, neither makes such submission/filing within the specified time nor makes such submission/filing along with LSF, such person shall be liable for penal action under the provisions of FEMA, 1999.

Disclaimer: The information contained in this Article is intended solely for personal non-commercial use of the user who accepts full responsibility of its use. The information in the article is general in nature and should not be considered to be legal, tax, accounting, consulting or any other professional advice. We make no representation or warranty of any kind, express or implied regarding the accuracy, adequacy, reliability or completeness of any information on our page/article. 

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