FEMA aspects of Private Trusts

Naresh Ajwani

Chartered Accountant

Contents page

Sr.	Topic
	Part A – Relevant factors and Background for discussion.
1.	Preface and general observations.
2.	Different factors for considering FEMA provisions.
2.1	Residential status of wealth owner, location of the wealth, and residential status of the heir / beneficiary.
2.2	Transactions.
2.3	Manner of distribution.
2.4	Kinds of trust.
2.5	Place of forming a trust.
2.6	Summary of different factors.
2.7	Ground reality.
2.8	Guiding principle.
3.	Some FEMA and Income-tax rules which are relevant to understand the FEMA issues for a private trust.
3.1	Payment to a non-resident by an Indian resident.
3.2	Creating an interest in favour of a non-resident.
3.3	Liberalised Remittance Scheme.
3.4	Receipt of funds.
3.5	Eligible Investor.
3.6	Returning Indian.
3.7	Foreign Direct Investment (FDI) in an eligible Indian entity.
3.8