Hi,
I need some money for my business and one of my friend who lives in USA is helping me out for same. I will return him back in 4-5 month. I have no idea whether I can borrow from a NRI, if yes how it is possible. I have heared of FEMA while searching on google so bit confused and need help...
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1. He told me that he will transfer money via xoom or moneytransfer online services.
2. If he transfers via these services then would it be counted as a loan as per RBI? I have seen that no person in India can borrow money in INR. Check this - https://www.rbi.org.in/Scripts/BS_FemaNotifications.aspx?Id=158 [See section 3 & 4]. In other word does XOOM OR MONEYTRANSFER are authorized for this by RBI and does these transcation come under INWARD REMITANCE?
3. How can I return back to him and what would be the mode of transfer?
4. I have also searched in google that XOOM transfer the amount from their local Bank account in India so how can I proove that money came from my friend only.
5. If my friend certify that he is transfering that amount for LOAN purpse, would it make sense? I mean this for the purpose that I will have to tell INCOME TAX DEPARTMENT that this is not income just a loan.
6. I have taken professional consultancy for same but I am getting answers like
a. You can never borrow money from a NRI and vice versa.
b. No one is telling me would XOOM OR MONEYTRANSFER services transfer would come in INWARD REMITANCE category as er RBI's instructions [FEMA]. Because as per my understanding if it comes in INWARD REMITANCE then certainly it will be a loan.
Thanks
Ricky
CAclubindia
