1. AIFTP’S FULL DAY WORKSHOP ON INVESTMENT IN INDIA TAX AND REGULATORY ASPECTS INVESTMENT BY PERSON RESIDENT OUTSIDE INDIA Presented by: Mr. Paresh P. Shah On 7 th AUG’ 2010 P.P. Shah & Associates Chartered Accountants Email: paresh@bom3.vsnl.net.in

3. FDI Auto Route Govt Route Portfolio NRI & PIO FII FVC Invst SEBI Regd FVCI VCF / IVCU Other Invst Govt sec -NCD On non repatriation basis FII NRI Overview of scheme of Investment by PROI

4. Overview of scheme of Investment by PROI Non Repatriation Partnership & Proprietorship of NRIs/PIOs Other PROIs Immovable Property PIOs / NRIs Other PROIs Branch of a Foreign Co. Foreign Embassies & Diplomats

19. FDI Transfer of Shares contd. Within the meaning of regulation 9 of Notification 20 Sale on Stock Exchange through regd broker Any Person PROI 4. Cir. No. 16 dt. 04/10/2004 under Regl. 10(A)(b) Sale through private placement PRII PROI 5. Condition Mode of payment Transferee Transferor Sr. No.

20. FDI – Transfer of shares Cir. No. 16 dt 04/10/2004 u/r (10)(A)(b) Transfer under buy-back and/or capital reduction scheme Indian Company PROI 6. Max upto 5% of paid-up capital with RBI approval u/r (10)(A)(a) Gift PROI PRII 7. Cir. No. 16 dt 04/10/2004 u/r (10)(A)(b) Sale through private placement PROI PRII 8. Condition Mode of payment Transferee Transferor Sr. No

21. FDI Transfer of Shares contd. * There is common condition that there is no previous venture or tie-up by the transferee of the shares in the same or allied field as that of the company. Form TS1Regl 10(B)(1), Prior approval of RBI Sale not covered by Regl 9 PRII PROI 9. Government approval Sale not covered by Regl 9 & 10(B) PROI NRI 10. Condition Mode of payment Transferee Transferor Sr. No.

42. Investment by FVCI- Method of Investment Investment through VCF Investment directly into IVCU FVCI FVCI VCF IVCU VCU Outside India In India

43. Investment by FVCI into Domestic VCF/ VCI - Regulatory Framework FVCI Registered with SEBI and subject to Government Guidelines dt. 20 th September 1995. Domestic VCF Subject to Government Guidelines. Registered with SEBI. Registered under section 10(23FB) of the Income Tax Act, 1961 for tax exemption subject to Ntf. No FEMA 20/2000-RB dt. 3 rd May 2000, Schedule 6. VCU Subject to Ntf. No. FEMA 20/2000-RB dt. 3 rd May 2000, Schedule 1.

44. Investment by FVCI into an IVCU FVCI No Registration will be required No Registration required IVCU Schedule 1 of Ntf. No. FEMA 20/2000-RB dt. 3 rd May 2000

50. Definition of NRI – FEMA 5 NRI Who is citizen of India Whose spouse is a citizen of India Who held Indian Passport at any time Whose father, grand father, mother or grand mother was citizen of India Whose spouse held Indian Passport or whose spouse’s parents or grand parents were citizen of India

51. Definition of PIO – FEMA 5 PIO Who is citizen of India Whose spouse is a citizen of India Who held Indian Passport at any time Whose father, grand father, mother or grand mother was citizen of India Whose spouse held Indian Passport or whose spouse’s parents or grand parents were citizen of India

52. Definition of PIO – FEMA 21 PIO Who is citizen of India Whose spouse is a citizen of India Who held Indian Passport at any time Whose father, grand father, mother or grand mother was citizen of India Whose spouse held Indian Passport or whose spouse’s parents or grand parents were citizen of India

53. Regulated Activities - Comprehensive inheritance from PROI/PRII 4(c) No Note 1 Agricultural Land Sale to PRII Gift to NRIs, PIOs & PRII 4(d) 4(f) Gift, sale & inheritance to NRIs, PIOs & PRII Other Land Acquisition & not in case of transfer specifically referred for transfer Inheritance 5(a) Sale & gift to PRII who is Indian Citizen-No inheritance 4(e) Sale, gift & inheritance to PRII only 3(b) Nt 2 Agricultural Land Transfer Purchase Inheritance Gift from NRIs, PIOs & PRII 4(a) 4(c) 4(b) Yes 3(a) Other Land In case of Branch office or other place of business, Form IPI has to be filed with RBI within 90 days Diplomatic offices of Foreign Government 5 Acquire PROI (All) Reg PIOs Reg NRIs Reg