What is FC-TRS and when do I have to file it?
It is the Indian report of a share transfer between a resident and a non-resident, and it runs on the same short clock as the report of a fresh issue. The event is the transfer itself. It catches a resident selling to someone abroad and someone abroad selling to a resident, which is why the direction of the transfer is the first thing to establish before anyone asks who files. It belongs to the exchange-control side, so a transfer can be entirely settled for tax and still be outstanding here.
Who files FC-TRS, the buyer or the seller?
The obligation is fixed by the transaction rather than by who would like the paperwork done, and in practice it is settled by working out which party is resident and which is not, then following that through. Buyer and seller often each assume the other is handling it, particularly in a secondary sale negotiated directly between shareholders with no company involvement. Agree it in writing when the transfer is agreed. The company whose shares are moving also has an interest here, because an unreported transfer sitting on its register is something it will be asked about later.
Do I need to report shares I gifted to my son abroad?
A transfer without money is still a transfer of shares between a resident and a non-resident, so treat a gift as reportable and work from there, rather than assuming that the absence of consideration removes the obligation. Families frequently move shareholdings this way when a child settles overseas, and the transfer is recorded in the register while nothing is reported anywhere else. The valuation question also survives a gift, because the transfer still has to be shown to have been made on terms the rules permit. Deal with both at the time, while the reasons are fresh.
I sold Indian shares to a non-resident and filed nothing, is that a problem?
It is a loose end rather than a catastrophe, but it is the kind that surfaces at the worst moment, usually when the company next raises money or is sold and somebody reconstructs the register. The exposure attaches to the transaction, not to the year, so time does not quietly close it. Establish the date of the transfer from the share transfer form and the register, work out what should have been reported, and settle the delay formally. Doing that while both parties are still in contact is far easier than doing it after one of them has moved on.
Does this reporting apply to a transfer between two non-residents?
The report is built around a transfer between a resident and a non-resident, so a transfer where both sides sit outside India is a different question and should not be assumed to fall in or out on instinct. What it certainly affects is the register of the Indian company, which will end up showing a new overseas holder with no reporting trail behind the change. Check the position for the specific transfer rather than relying on a general answer, and keep the company informed, because the company is the one that has to answer for its own register.
Why does my share transfer need a valuation as well as a report?
Because the rules govern the price as well as the fact of the transfer. Cross-border transfers are constrained in the direction of the pricing, so that value is not shifted out of or into the country on terms that would not be available to an unconnected party. The report describes what happened; the valuation shows that the terms were permitted. Prepare it before the transfer is executed rather than after a question is asked, and keep the workings and not only the signed conclusion. A price fixed between family members is the case most often challenged.
What is double taxation?
Double taxation means the same income being taxed by two authorities. It comes in two forms: juridical, where two countries each tax one person on one amount, and economic, where two different people are taxed on the same underlying profit — a company on its earnings and a shareholder on the dividend paid out of them. Relief comes from a treaty, a foreign tax credit, or an exemption, and which one applies depends on the income type. How to avoid double taxation sets out the routes.
How does the treaty tie-breaker work when both countries say I am resident?
As a sequence, stopping at the first test that gives an answer: where you have a permanent home available; if in both or neither, where your centre of vital interests is; then habitual abode; then nationality; and if all of those tie, the two tax authorities decide by agreement. It is evidential rather than elective — you do not choose your treaty residence, you demonstrate it, which makes the record of homes, family and time the substance of the claim. See tie-breaking dual residency.
