Inviting all respectful members here to disclose about fund transfer methods and about forex legality for an Indian Citizen.
Hope some experienced member can really help us regarding fund transferring norms for forex trading.

Personally, I'm not an NRI but my father is and he have foreign bank accounts. I don't want to trade in an account under his name but how I can utilise his money legally to trade in my account? I know many ways...but looking ffor a legal and less taxable way when the profits brought back to india directly or indirectly.

Welcome all your views and discussions regarding this topic here.

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TFL
Trading For Living.

Recently I contacted Interactive brokers customer care and they said...

Quote:

Sir, Individuals who wish to trade local (NSE) and non-local products may do so under a dual account structure whereby a domestic account is maintained for the local activity and an overseas account for non-locally listed products. Accordingly, Indian regulations restrict Forex trading to the overseas account and don't allow for this activity in the domestic account. In addition Forex trading requires margin permissions and Indian regulations only allow IB to provide margin permissions in an overseas account carried on behalf of an Indian resident who is not a citizens. Indian residents who are also citizens may only be provided with a cash type overseas account and a cash type account by design cannot trade Forex. Regards, IB -- Interactive Brokers Customer Service

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TFL
Trading For Living.

Dear TFL, I am rajendran from TN. I had the same doubt and came across a solution when it happened to read a RBI circular. Here with i added the url. pl check it [URL="//http://rbi.org.in/Scripts/BS_FemaNotifications.aspx?Id=155"]

Originally Posted by rajendransg

Dear TFL, I am rajendran from TN. I had the same doubt and came across a solution when it happened to read a RBI circular. Here with i added the url. pl check it [URL=[http://rbi.org.in/Scripts/BS_FemaNotifications.aspx?Id=155"]

Its simply legal as per even recent RBI norms, its hard if its illegal to do business from any country in general, in case its illegal its not as illegal as smuggling cocaine or weapons

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Not Every Gambler is a Loser

Originally Posted by TFL

Inviting all respectful members here to disclose about fund transfer methods and about forex legality for an Indian Citizen. Hope some experienced member can really help us regarding fund transferring norms for forex trading. Personally, I'm not an NRI but my father is and he have foreign bank accounts. I don't want to trade in an account under his name but how I can utilise his money legally to trade in my account? I know many ways...but looking ffor a legal and less taxable way when the profits brought back to india directly or indirectly. Welcome all your views and discussions regarding this topic here.

The wire transfers are perfectly legal option to trade in Forex market. First of all, it is not ILLEGAL as there is no LAW prohibiting it. There is not even a LAW mentioning this.
Second, Alpari UK which is a FX broker opened its office in Mumbai some time back. Had it been Illegal...How could SEBI/RBI have allowed such an international famous broker to set its shop up in India?
Alpari has also made a tie up with HDFC for wire transfers.

I would post some excerpts from an email conversation that I had with them in some time. Have to dig my mailbox for it

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Learning Basics of Forex
"It was never my thinking that that made the big money for me. It always was my sitting."

Ok so here is the snippet:

Quote:

1) There is a lot of confusion on FX trading being prohibited for Indians as we are not authorised to remitt funds abroad for margin funding. Your views on it please. Please refer to the attached RBI circular. Please refer to point K of Schedule I.

And here is the file attached.

Thats the info that I have

Attached Files

Capital account transactions 1[1].pdf (12.0 KB, 26 views)

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Learning Basics of Forex
"It was never my thinking that that made the big money for me. It always was my sitting."

Originally Posted by Kittu

Ok so here is the snippet: And here is the file attached. Thats the info that I have

http://www.rbi.org.in/scripts/FAQView.aspx?Id=66
http://www.rbi.org.in/scripts/Notifi...=0&Id=4275#a13
http://www.rbi.org.in/scripts/FAQView.aspx?Id=53
http://www.rbi.org.in/scripts/Notifi...Mode=0&Id=5118


Under the LRS, one can remitt money for investements but not for margin trading. This position is as of July 01, 2009.

Excerpt from FAQ:-

"Q1. Provide an illustrative list of capital account transactions permitted under the scheme?

The remittance under the Scheme is available to the resident individuals for any permitted current or capital account transactions or a combination of both. Under the Scheme, resident individuals can acquire and hold immovable property or shares or debt instruments or any other assets outside India, without prior approval of the Reserve Bank. Individuals can also open, maintain and hold foreign currency accounts with banks outside India. However, it was clarified that remittance from India for margins or margin calls to overseas exchanges / overseas counterparty are not allowed under the Scheme."


BTW, there is a legal way-out

Originally Posted by MoneyGurukul

BTW, there is a legal way-out

And what is that


I wouldnt still call Fx ILLEGAL....there are enough reasons not to call it Illegal. But would be really eager to read your comments on the above.

__________________
Learning Basics of Forex
"It was never my thinking that that made the big money for me. It always was my sitting."

http://www.rbi.org.in/SCRIPTS/BS_Fem...ns.aspx?Id=155

take a look at capital account transactions

Conflicting huh?

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Learning Basics of Forex
"It was never my thinking that that made the big money for me. It always was my sitting."

Originally Posted by Kittu

Reserve Bank of India take a look at capital account transactions Conflicting huh?

There is no conflict. It's a settled principle of law that a specific provision over-rules a general provison.

The general provisions are permitted Capital Account Transactions and LRS while specific provision is "remittance from India for margins or margin calls to overseas exchanges / overseas counterparty " (Margin Trading).

Hence, in a nut-shell, investment in shares,etc. is allowed but trading of assets where entire sum of payment is not instantly due (Futures Trading, Forex Trading,etc.) is not permitted. That will mean that one can buy IBM shares but can not go long on IBM futures.