Latest news with #LiberalisedRemittanceScheme
Time of India
3 days ago
- Business
- Time of India
Bengaluru realtor, family face Fema violation case
Bengaluru: The Directorate of Enforcement (ED), Bengaluru zonal office, filed a complaint under Foreign Exchange Management Act, 1999, against Errol Fernandes, promoter of Ferns Estates and Developers, and his family members for alleged foreign exchange violations amounting to over Rs 20.5 crore. According to an ED press release, the adjudicating authority issued a show-cause notice to Fernandes and his family following the complaint. The investigation was initiated based on information that Fernandes and his family contravened Fema provisions between 2017 and 2024. ED probe revealed remittances totalling over Rs 20.5 cr were sent abroad by Fernandes and his family members, the press release said. You Can Also Check: Bengaluru AQI | Weather in Bengaluru | Bank Holidays in Bengaluru | Public Holidays in Bengaluru According to ED, nearly Rs 3.7 crore was remitted under Liberalised Remittance Scheme (LRS) for investment purposes. However, after redeeming the investments, the funds were retained in foreign accounts and repatriated back to India after a significant delay. Further, the agency found nearly Rs 16.9 crore was sent abroad under the pretext of family maintenance through LRS. Investigation, however, revealed none of his family members or relatives was residing abroad during that period. The funds were allegedly used for investments overseas and, upon redemption, retained abroad before being repatriated with delays, the press release said. The ED said these actions constitute significant violations of Fema provisions, prompting issuance of show-cause notice.
The Hindu
3 days ago
- Business
- The Hindu
ED register case against real estate company under FEMA
The Directorate of Enforcement (ED) on Wednesday registered a complaint against Errol Fernandes, promoter of realty firm Ferns Estates and Developers, and his family members under the Foreign Exchange Management Act, 1999 (FEMA) for contravention to the tune of ₹20.5 crore and issued show-cause notices. According to the official release, the enquiries in the matter were initiated on the basis of credible information that Errol Fernandes had made significant contraventions of provisions of FEMA, 1999 during the period from 2017 to 2024. ED investigation revealed that Mr. Fernandes and his family members sent remittances to the tune of ₹ 20.5 crore abroad, ED said. Investigation revealed that ₹3.6 crore was remitted by Errol Fernandes and his family members for investment under the Liberalised Remittance Scheme(LRS). However, on redemption of the investment, the amount was kept in the accounts abroad and remitted back to India after a long delay, ED said. Further, investigation revealed that ₹16.8 crore was remitted by them for family maintenance under LRS, however, investigation revealed that no family members and relatives were residing abroad during that period and the money taken outside India for family maintenance was also used for investment outside India. This money also, on redemption of the investment, was kept in the accounts abroad and remitted back to India after a long delay, ED claimed.
Time of India
4 days ago
- Business
- Time of India
Holiday loans overtake home makeovers as top driver of personal borrowing
Mumbai: India's appetite for credit-fuelled leisure is growing—and it is showing up in both loan books and foreign-exchange data. A new report from Paisabazaar, based on a survey of over 5,700 respondents in 97 cities, finds that holidays have overtaken home renovations and medical needs as the leading reason for taking personal loans. In the first half of 2025, 27% of borrowers took a loan to fund a vacation, up from 21% two years earlier. That puts travel ahead of home improvements (24%), credit card repayments (11%), medical expenses (9.6%), education (6.1%) and weddings (5.4%). According to Santosh Agarwal, the firm's chief executive, the figures reflect a growing willingness to use credit for lifestyle goals. The shift is part of a broader surge in travel. Govt data show that more than 3 crore Indians travelled abroad in FY24, with numbers climbing further in FY25. On spending, the Reserve Bank of India's data under the Liberalised Remittance Scheme indicate that Indians spent about $16.96 billion on foreign travel in FY25—accounting for 57–60% of all outward remittances during the year. Millennials remain the largest cohort of holiday-loan borrowers, making up nearly half the total. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like This new air conditioner cools down a room in just seconds News of the Discovery Undo But the fastest growth is among Generation Z: their share has more than doubled since 2023, to 29%. The report attributes this to a 'new-age' consumer base—digitally adept, aspirational, and willing to spread the cost of leisure. Demand is also shifting away from India's biggest cities. Tier-2 and Tier-3 centres accounted for 71% of applications in early 2025, up from 68% in 2023. Borrowers in Lucknow, Surat, Jaipur, Patna and Durgapur are driving the change. In contrast, Tier-1 cities made up 29% of the market, with Delhi and Hyderabad residents responsible for more than half that share, followed by Mumbai (15%) and Bangalore (14%). The sums borrowed are modest. Three in ten applicants took between Rs 1 lakh and Rs 3 lakh, while 20% opted for Rs 50,000 to Rs 1 lakh and 19% for Rs 3 lakh to Rs 5 lakh. Many prefer smaller loans that can be repaid quickly. Private sector employees dominate the pool, at 65%, followed by business owners (17%), self-employed professionals (12%) and government staff (6%). Borrowers' destinations vary. In foreign travel, South-East Asia leads, attracting 44% of respondents, ahead of the Middle East (32%) and the USA and UK (around 20% each). Within India, Goa tops the list, followed by Kashmir and Himachal Pradesh. Loan demand peaks in January and in May–June, which together account for 60% of borrowings. For a growing number of Indians, a holiday now comes with an EMI—and often a boarding pass. Stay informed with the latest business news, updates on bank holidays and public holidays .
Time of India
5 days ago
- Business
- Time of India
Dubai real estate deals hit regulatory hurdle! Indian buyers who bought homes using international credit cards in a soup; here's why
AI-generated image Indian property buyers in Dubai are facing regulatory challenges after using international credit cards (ICCs) for property purchases. They opted for this payment method through builder-shared links or during UAE visits, making down payments and instalment payments. The process appeared straightforward, avoiding bank paperwork and potentially circumventing the 20% tax-collected-at-source ( TCS ). However, they allegedly misused ICCs, which are designed for current account transactions like purchasing books, digital content, and hotel bookings, rather than capital account transactions such as property acquisition. While no explicit regulation prohibits ICC usage for overseas property purchases, banking professionals interpret RBI notifications as restrictive of such practices. Also read: Foreign inflows hit 7-month high in primary market with $1.7 billion in July; secondary market sees sharp outflows To address scrutiny from income tax and enforcement authorities, these investors are pursuing corrective measures. They plan to remit funds through RBI's Liberalised Remittance Scheme (LRS), while cancelling previous credit card transactions, citing error. Subsequently, they expect refunds from builders, failing which property disposal becomes necessary. "Indian residents who have unintentionally paid money through credit card for purchase of property outside India need to approach RBI to regularise their mode of payment. RBI should take a lenient view as the money paid through credit card is a legitimate payment and only the mode of payment was wrong. The regulator should compound the contravention if applied for and need not ask to unwind the transaction or sell the property," said Rajesh Shah, partner at the CA firm Jayantilal Thakkar & Co, as quoted by news agency PTI. While compounding requires accepting violation and paying fines, some buyers prefer discretion, quietly cancelling credit card transactions. The LRS permits resident individuals annual transfers of $250,000 for overseas assets and online purchases. ICC usage within India for foreign purchases counts towards LRS limits, whilst overseas travel expenses are exempt. Property purchases via ICC remain non-compliant, regardless of transaction location. RBI's LRS circular specifies maintaining bank accounts for minimum one year before capital account remittances. According to Moin Ladha, partner at the law firm Khaitan & Co, quoted by ET, "Purchase of property overseas is permitted specifically under Foreign Exchange Management (Overseas Investment) Rules, 2022. These rules prescribe the mode and conditions permitting such acquisition, which include inheritance, gift, funds in a resident foreign currency account earned as an erstwhile NRI, and remittance under the LRS. Since general permission is not available to acquire a property by using an ICC, any such acquisitions need to be regularised (by a post facto approval or sale of the property) followed by compounding the interim non-compliance with RBI." Property purchases abroad remain subject to 20% TCS under section 206C(1G)(a) of the I-T Act, regardless of RBI's stance on transactions, notes Ashish Karundia, founder of Ashish Karundia & Co. Stay informed with the latest business news, updates on bank holidays and public holidays . Discover stories of India's leading eco-innovators at Ecopreneur Honours 2025
The Hindu
6 days ago
- Business
- The Hindu
U.S. stocks and tax implications in India
Investing overseas, especially in the U.S., is not just about opening a broker account, picking a stock, clicking a 'buy now' button and enjoying double-digit returns. It requires a thorough understanding of rules and regulations and tax implications of both the countries, open/hidden costs incurred and logistics behind it. It is crucial to understand how to transact legally, without landing in trouble. Let's check this. Legal framework On February 4, 2004, Liberalised Remittance Scheme (LRS) was introduced with a limit of $25,000. Later, owing to the then prevailing micro- and macro-economic factors, the LRS limit was revised in stages. Currently, as per the LRS, Indian resident individuals, including minors, can remit up to $2,50,000 per financial year for permissible transactions such as education, travel and investments including the U.S. stocks. If your total foreign remittance in a financial year exceeds ₹10 lakh, Tax Collected at Source (TCS) will apply and the rate depends upon the purpose of remittance. Withholding tax If you receive dividend from a U.S. stock, it is treated as foreign income and will be subject to an upfront withholding tax of 25% in the U.S. Further, the balance 75% of the dividend income is taxable in India as per slab rates. However, thanks to the India-U.S. Double Taxation Avoidance Agreement (DTAA), you can offset the dividend tax withheld in the U.S. against your tax liability in India, by claiming a foreign tax credit by filing Form 67. Again, it is easier said than done. Individuals face multiple challenges while claiming DTAA benefits. For instance, exchange rates, time duration etc. viz. the fiscal year in the U.S. is different from that of India's April-March cycle. The DTAA is a treaty between the two countries to avoid double taxation by individuals with financial dealings in both the countries. Capital gains The U.S. does not levy capital gains tax for Indian residents who invest in U.S. stocks, if they are considered Non-resident Aliens (NRAs) for the U.S. tax purposes. But India taxes capital gains on your U.S. stock profit. If you have held U.S. stocks for more than two years (24 months), it is considered long-term capital gains (LTCG) and will be taxed at 20% tax plus surcharge and cess. If you have held the shares for less than 24 months, it is considered short-term capital gains and is taxed according to your income slab rate. Disclosure, compliance As per the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, non-disclosure of foreign assets is considered a violation and attracts a penalty of ₹10 lakh per year of default for an undisclosed foreign asset. In extreme cases, you might have to face imprisonment of up to seven years. All foreign assets, including the U.S. stocks, must be declared in Schedule FA of the Income Tax Return (ITR) portal while filing returns. Any non-disclosure of the U.S. stocks, be it even for a negligible amount of $1, will attract hefty penalties under the Black Money Act, 2015. Further, most people are under the impression that you should disclose details about the U.S. stock holdings only if the stocks are sold and the capital losses/gains are realised. That's not true. It is immaterial whether you sell the stock, or you just keep accumulating stocks for long-term. Even if you buy a single U.S. stock for just $1 or even less, it is advisable to disclose it in under Schedule FA. Further, even if you receive a dividend of $1 or even less than that, it must be disclosed. FA non-disclosure Suppose, let's assume that owing to lack of awareness, you have not disclosed under Schedule FA. Against this backdrop, if your returns are already filed, the first option is voluntary disclosure via revised return (if applicable) and the second option is to file updated return (ITR-U) under Section 139(8A), applicable for the last two assessment years, but with a penalty. In either case, it is advisable to seek the help of an experienced auditor to review past returns, fix errors and stay compliant from thereon. If a mistake of non-disclosure, whether deliberate or unintentional, has happened, early correction is safer than receiving a notice from the IT Department. (The writer is an NISM & CRISIL-certified Wealth Manager and certified in NISM's Research Analyst module)
