FC-TRS is Required

FC-TRS is Not Required

Transfer of existing capital instruments between a resident and a non-resident. The capital instruments covered, including:

Transfer between two persons resident in India.

Compulsory Convertible Preference Shares (CCPS)

Transfer from a non-resident holding securities on a non-repatriable basis to a resident, and vice versa, where treated as a domestic transaction.

Compulsory Convertible Debentures (CCD)

Transfer between two non-residents holding securities on a repatriable basis, where repatriation status does not change.

Share warrants

Gift of capital instruments, which follows a separate reporting process.

Other capital instruments as defined under the NDI Rules

Fresh issue/allotment of securities to a non-resident — reported through FC-GPR.

For Sale / Transfer for Consideration

For Gift / Transfer Without Consideration

Board Resolution approving transfer

Name and address of transferor (donor) and transferee (donee)

Form SH-4

Relationship between transferor and transferee

Shareholding pattern – before and after transfer

Reason for gift

Share Purchase Agreement

Valuation Certificate

Consent letter from buyer

Undertaking regarding USD 50,000 annual limit

Consent letter from seller

Executed Gift Deed

Declaration by non-resident transferee

Sectoral Cap Compliance Certificate

Valuation Certificate not older than 3 months

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FIRC / Bank Remittance Certificate

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KYC of foreign investor

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Press Note 3 Declaration

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Step

Phase / Action Item

Key Requirements & Details

Step 1

Create an ‘Entity User’

Register the company on the RBI FIRMS portal by providing CIN, company details, email, mobile number, PAN, and an Authorization Letter on company letterhead. RBI reviews and emails credentials upon approval.

Step 2

Register Entity & Create ‘Business User’

• 2A. Entity Master: Input basic details like CIN, address, NIC code, and fully diluted paid-up capital. (Note: No draft saves allowed, prepare data in advance).

• 2B. Business User: Register the authorized filer, select the correct AD bank, upload an authorization letter, and wait for approval credentials.

Step 3

Initiate the FC-TRS Filing

Log in as the approved Business User on the FIRMS portal, navigate to the Single Master Form (SMF), select FC-TRS, and click ‘Add New Return’. Link prior acknowledgment numbers if applicable.

Step 4

Enter Transfer & Transaction Details

Disclose transfer mode (sale/gift), residential status of buyer/seller, FEMA transfer classification, transfer date (matching the Share Transfer Deed/Agreement), nature of transfer, and party details.

Step 5

Enter Capital Instrument Details

Provide instrument type (equity, CCPS, CCDs), quantity transferred, conversion ratio, fully diluted equity shares, face value, transfer price per unit, total consideration, and fair value from the valuation certificate.

Step 6

Enter Remittance Details

(Not applicable for gifts) Specify banking channel mode, AD bank branch, INR amount received/remitted, tranche details, FIRC/debit statements, and foreign entity KYC attachments.

Step 7

Submit and Track

Verify all numerical entries, valuation figures, and calculations, then submit. The form routes to the AD bank for approval, queries, or resubmission corrections.

Parameter / Condition

Rule & Calculation Details

Filing Timeline

Must be filed within 60 days from the date of transfer of capital instruments.

LSF Formula

INR 7,500+0.025%×A×n

• A = Amount involved in the delayed reporting

• n = Number of years of delay (rounded upward to the nearest month and expressed up to two decimal points)

Caps and Rounding

The maximum LSF is capped at 100% of the amount involved (A) and is rounded upward to the nearest hundred.

Time Window

The option to pay LSF is available only up to 3 years from the original due date of filing.

Payment Deadline

Must be paid within 30 days from the date of the advice issued by the RBI system, otherwise the advice becomes void (and a fresh application resets the delay calculation period).

Non-Compliance Consequence

Failure to file or regularize via LSF makes the matter liable for penal action under Section 13 of FEMA, 1999.

Transfer Scenario

Listed Company

Unlisted Company

Resident → Non-Resident

Price as per applicable SEBI pricing guidelines.

Transfer price must not be lower than fair value.

Non-Resident → Resident

Price as per applicable SEBI pricing guidelines.

Transfer price must not exceed fair value.

Valuation

As per applicable SEBI requirements.

Fair value determined using an internationally accepted valuation methodology on an arm’s-length basis.

Eligible Valuer

As applicable.

Chartered Accountant, SEBI-registered Merchant Banker or practising Cost Accountant.