Our Bureau

Mumbai, Aug. 26

THOSE who transfer by way of gifts, securities including shares or debentures to residents outside India will have to obtain prior approval from the Reserve Bank of India.

The value of the gift or security is not to exceed the rupee equivalent of $25,000 during a calendar year.

A notification issued by the central bank states the gift should not exceed 5 per cent of the paid-up capital of the Indian company or breach the company's sector cap/foreign direct investment.

While making out the application to the RBI, the transferor will have to specify the relationship with transferee and the reason for the gift.

A certificate issued by a chartered accountant on the market value of government securities, treasury bills, bonds as well as shares and debentures (as per SEBI guidelines) would have to be furnished. In case of units of domestic mutual funds and units of money market mutual funds, a certificate from the issuer on the net asset value of such security would be required.

(This article was published in the Business Line print edition dated August 27, 2005)
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