Foreign Exchange Management Act

helpstartup@rbi.org.in

January 24, 2016 Leave a comment

Today if you have an idea and a business plan, there is probably some or other way to raise money for it somewhere or the other in the world. The offshore sources from which startups in India are raising funds include individuals, private equity players and crowdsourcing

Cross-border transactions of resident Indians are subject to the regulatory regime provided by the Foreign Exchange Management Act, 1999 and businesses are supposed to know the law before raising capital. However ,the government observed that many of the startups are being promoted by very young and inexperienced individuals. Moreover, the amount raised by some of them run into only a few lakhs, making it difficult for them to hire law firms to ensure that they comply with FEMA.

So the RBI has now set up a dedicated helpline for advice on cross-border remittances which are subject to guidelines issued under the Foreign Exchange Management Act.The helpline is actually an email ID (helpstartup@rbi.org.in) through which the RBI will respond to queries and offer guidance/assistance to start-ups for undertaking cross-border transactions within the ambit of the regulatory framework.While seeking guidance, start-ups have to provide complete information to the RBI and mention the specific issues on which they need guidance in relation to the Foreign Exchange Management regulations so that the personnel attending the helpline can offer timely and effective information.

Filed under Entrepreneurship, Tool Kit Tagged with cross boarder transactions, cross border remittances, crowdsourcing, FEMA, Foreign Exchange Management Act, helpline, postaday, Private Equity, start-up finance, startups

Capital Gains Tax On Inherited Properties

January 26, 2014 2 Comments

wealthymatters At present, there is no tax on inheritance in India. However,when you sell these inherited properties, you would be liable to pay income-tax in India on the gains earned by you on the sale.

For determining capital gains, you will get a deduction of the cost incurred by the previous owner to acquire the property as well as any expenditure that you directly incur to sell the property. If the date of acquisition of the property is more than three years back, you will get a deduction of the indexed cost of acquisition which is the original cost as adjusted by the cost inflation index from the year of purchase to the year of sale. If the property has been acquired before 1 April 1981, you have the option of substituting the fair market value as on 1 April 1981 in place of the original cost. Thereafter, you can claim indexation benefit on the substituted cost.

The rate of tax, including cess on long-term capital gains, is 20.6% and on short-term capital gains, it is 30.9%. If your income exceeds Rs.1 crore, the rate of tax would be 20.66% and 33.99%, respectively. Read more of this post