Is it mandatory for NRIs to provide financial transaction details to the Indian government?

Steps are being taken to prevent money laundering

By N.R.I. Problems/H. P. Ranina

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Published: Tue 23 May 2023, 5:34 PM

Recently my chartered accountant in India asked for information regarding certain financial transactions which I had made. Am I supposed to provide this information under any rule or law in India?

ANSWER: The scope of the Prevention of Money Laundering Act has been widened whereby chartered accountants, cost accountants and company secretaries are required to report to the government certain financial transactions which are made by them on behalf of their clients. In a notification which has been recently issued by the revenue department, the transactions which are covered pertain to purchase or sale of immovable property as well as managing funds of clients in investments in securities and other assets. Therefore, these professionals will be required to conduct KYC procedures of all clients entering into the aforesaid transactions. The law mandates that these reporting entities will take suitable steps to examine the ownership and financial position of their clients which includes determining the source of funds from which investments have been made. Proper records will have to be maintained in respect of the transactions by the accountants and company secretaries. It is further provided that in case a transaction undertaken by a client appears to be suspicious or in violation of a law, it will have to be reported to the concerned authority, failing which a penalty would be leviable.

Question: I belong to a family which has an agricultural background having ancestral land. I am very keen to apply new technological developments for increasing crop output and helping farmers to increase their income. Are agencies available in India to help in this process?

ANSWER: There are some hi-tech companies in India which have developed a cloud solution platform built on satellite imagery, artificial intelligence, machine learning, data analytics, weather intelligence, and agronomy sciences. Collectively, these technical tools provide actionable insights throughout the farming life cycle, from cultivation to harvesting to food supply logistics. Insights are provided on crop health and crop growth, apart from giving information on the types of crops which can be grown in different regions and in different climatic conditions. The cloud solution platform also provides information pertaining to yield estimation, irrigation scheduling, pest and disease prediction, nitrogen uptake, water stress detection and harvest date estimation. For every type of crop, different predictive intelligence models have been developed. The services of these firms are in great demand not only in India but also internationally from companies which are involved in food processing.

Question: My grandmother died a few years ago and we have now found that she had deposits lying with several banks and companies. She had also invested in shares and debentures of companies. The question is about claiming these assets, I being the only surviving heir. Can you provide some information?

ANSWER: The Reserve Bank of India and other regulators have been directed by the finance ministry to expedite the settlement of unclaimed deposits and securities lying with them. A unified portal has been launched by the Government to assist claimants in this regard. Unclaimed amounts lying as deposits with companies or maturity proceeds of debentures or preference shares are required to be transferred by the company to the Investor Education and Protection Fund. Therefore, you will have to approach the office of the IEPF for claiming the amount. For this purpose, you will have to provide a copy of the probated will of your late grandmother and establish your relationship with adequate proof. The IEPF has been forthright and cooperative in settling claims made by heirs of deceased depositors, debenture holders and shareholders. Certain timelines have been laid down for doing so by the Ministry of Corporate Affairs.

H.P. Ranina is a practising lawyer, specialising in tax and exchange management laws of India.

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