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July 2015

A. P. (DIR Series) Circular No. 107 dated June 11, 2015

By Gaurang Gandhi Chartered Accountant
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Notification No. FEMA.337/2015-RB dated March 2, 2015
Notification No. FEMA.338/2015-RB dated March 2, 2015
Subscription to chit funds by Non-Resident Indian on non-repatriation basis

Presently, a person resident outside India cannot make investment in India, in any form, in a company or partnership firm or proprietary concern or any entity, whether incorporated or not, which is engaged or proposes to engage “in the business of chit fund”.

This circular now permits Non-Resident Indians (NRI) to subscribe to the chit funds, without limit, on non-repatriation basis, provided: –

i. The chit fund is authorized by the appropriate Authority to accept subscription from Non-Resident Indians on nonrepatriation basis.
ii. The subscription to the chit funds must be brought in through normal banking channel, including through an account maintained with a bank in India.

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