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CS Executive · Economic, Commercial and Intellectual Property Laws · Foreign Direct Investments - Regulations and Policy

Priya, resident in India, inherited shares of a company incorporated in Singapore from her uncle, who was resident outside India at his death. Under section 6 of FEMA, 1999, what is her position on holding the shares?

She may hold, own, transfer or invest in the shares. Section 6(4) of FEMA permits a person resident in India to do so for a foreign security acquired by inheritance from a person resident outside India, without any requirement of sale, permission or restriction on transfer.

  1. AShe may hold, own, transfer or invest in them, as they were inherited from a person resident outside IndiaCorrect
  2. BShe must sell them to an authorised person within a month of inheriting
  3. CShe may hold them only with prior Central Government permission
  4. DShe may hold them but cannot transfer them

Explanation

Section 6(4) allows a resident in India to hold, own, transfer or invest in foreign currency, foreign security or immovable property outside India if inherited from a person resident outside India. Nothing requires sale or permission, and transfer is expressly allowed.

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