7 Most Important Limits and 7 filings in FEMA, LLP, FC | Don't Miss | CA Inter Law May 2026

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[00:00:00]Let's quickly revise limits in FEMA 1999. But before I proceed, a small announcement.

[00:00:08]Yesterday I uploaded a marathon on exceptional topics which is of 3 hour 45 minutes approximately.

[00:00:14]Let me remind you about exceptional topics marathon. In recent Jan 26 examinations 70 marks came from exceptional topics marathon. And this time also I'm expecting the same.

[00:00:24]Throughout the exceptional topics marathon I used this 24 pages document which is available on sa for CNCMA website just click on free resources you'll find May 26 expected questions and survival plan and go through the second document so after completion of revision of each and every chapter go through that video lecture is it clear fine let's proceed first one residential status of a natural person depends on period of stay in the preceding financial year and the period of stay in the preceding financial year should be greater than 182 days. It's not yet at least it's greater than more than 182 days. And for a person other than natural person, you need to check place of incorporation, place of establishment. So branches, offices, agencies which were situated outside India but managed by no owned or controlled by a person resident in India. Now this branch or office or agency becomes person resident in India. Is it clear everyone? Next. This greater than 182 days in the preceding financial year is not applicable in two cases. One, a person leaving India for the purpose of job outside India, business outside India, intention to stay outside India for uncertain period. At the same time, person coming to India for the purpose of job or business or period to stay in India for uncertain period. So don't apply this condition. Next one, advertisement. You all know current account transactions are of three categories. Prohibited current account transactions, CG permitted current account transactions, RBA permitted current account transactions out of three. Second one, CG permitted current account transactions. Let's see advertisement. Advertisement by others.

[00:02:09]CG permission not required.

[00:02:10]Advertisement outside India for which withdrawal of foreign currency by the persons other than state government public sector undertakings permission not required sir state government PSU making an advertisement in two types of media you know foreign print media and other media other media permission not required. Now coming to foreign print media what is the purpose tourism foreign investments international bidding then also permission from CG not required. In case of other purposes other than tourism, foreign investments, international building, let's see how much amount is involved. If it is up to $10,000, permission not required. If it is exceeding $10,000, yes, permission is required. So carefully listen. State government or public sector undertaking incurring advertisement expenditure in a print foreign print media for a purpose other than tourism, foreign investments, international bidding exceeding $10,000, CG permission is required. Next prize money sponsorship of sports activity.

[00:03:06]Who is withdrawing foreign currency is important. If the amount of foreign currency is withdrawing by international body, national body, state level body, permissions not required. Other than these three bodies, amount withdrawal, you know, withdrawal amount if it is up to $1, permission not required. Exceeding $1, permission of CG is required.

[00:03:28]Next one, RBA permitted current account transactions. Of course without prayer approval and prayer approval is required for other cases other than these cases.

[00:03:36]Let's see for individuals LRS up to $2.5 is there exception employee on deputation basis came to India he can withdraw his net salary net salary in foreign currency without any limits without any limits. Immigration limits not applicable. Medical treatment abroad uh limits not applicable. Studies abroad limits not applicable. But here you have to show sufficient evidence. Next one.

[00:04:01]Coming to the non-individual. Coming to the non-individual. Yes. Donations up to $5 million or 1% of 3 years foreign exchange earnings. It's not average of threeear foreign exchange earnings. It's 3 year foreign exchange earnings 1%. So $5 million or 1% of the 3 years foreign exchange earnings whichever is lower RBA permission not required. That means RB permission is required in case of exceeding the limits. Real estate commission up to $25,000 or 5% of the inflow whichever is higher it's not lower whichever is higher RBA permission is not required consultancy services for infra projects up to $10 million others other than infra projects up to $1 million permission from RBI is not required pre-incorporation expenses withdrawal up to $1 or up to 5% of the investment they brought into India whichever is higher RBI prior approval is not required RBI prior approval is required only if the withdrawals exceed the specified limits out of these four limits. Remember for donation it is whichever is lower and for real estate commission pre-inccorporation expenses you can see whichever is higher. Clear?

[00:05:09]Next one clubbing sir LRS LRS clubbing allowed not allowed for purchase of capital account trans you know for purchase of immobile property outside India for purchase of an asset outside India. So here clubbing generally not allowed but clubbing is allowed in case property is owned by the persons who are involved in the clubbing. Suppose husband and wife together want to withdraw some 5 lakh USD for acquiring a property outside India. Now clubbing is allowed if that property is registered in the name of both husband and wife.

[00:05:42]Other cases not allowed. clearer everyone. Apart from these limits, you can see in prohibited current account transactions uh for uh commission on exports of tea and tobacco under state rupee credit route up to 10% is allowed up to 10% is allowed exceeding 10% prohibited. Clear? Next one, freely permissible capital transactions without any limits. you know amotization of loans, depreciation of uh uh investments those two purposes withdrawal of foreign exchange for those capital transactions is permitted without any limits. Can I proceed next? Let's quickly revise LLP act filings and important time limits.

[00:06:25]You know LLP will make filings with ROC in these three cases. What are those three cases? One is statement of account and solveny you know charge creation, financial statements filings. Next one, annual returns event based filings.

[00:06:39]Statement of account and solveny should be filed within 30 days after 6 months from the closure of financial year.

[00:06:44]Recently financial year 2526 completed ma. So statement of account and solveny should be prepared by 30th September 2026 and it should be filed with ROC within next 30 days that means 30th October 2026. Applicable form is form number eight. Applicable form form number eight. Annual returns should be filed within 60 days of closure of financial year. So what is the closed of financial year? Pre recent financial year closure date is 31st March 2026. To this add 60 days. So 30 30th May 2026.

[00:07:17]By 30th May 2026 form 11 should be filed with ROC. By 30th October 2026 form 8 shall be filed with ROC. Form 8 is for statement of account and solveny. Form 11 is for annual returns. And apart from this event based filings are also there.

[00:07:31]Retirement of partner within 30 days of the event. Changes in details of the partners within 30 days of the event.

[00:07:36]Appointment of designated partners within 30 days of appointment. Change of name within 15 days of rectification of rectification of name nothing but change of name. LLP agreement. Any changes made to the LLP agreement within 30 days of changes conversion into LLP. After conversion of uh you know unlisted company into LLP or partnership for firm into LLP or private company into LLP the newly constituted LP has to communicate with previous registars within 15 days of conversion and any order passed by the NCLT within 30 days of NCLT order.

[00:08:07]Yes, communicate with ROC. Next coming to the financial year. Generally financial year is a period between April to March. April and March 1st April to 31st March. But if date of incorporation is falling after 30th September after 30th September then closure date will be 31st March of 2027 that means maximum duration of first financial uh 18 months. Next small LLP remember important limits contribution 25 lakhs up to 25 lakhs turnover up to 40 lakhs.

[00:08:39]Next one, compounding of offenses. This benefit is available for those offenses where imprisonment is not a punishment.

[00:08:46]Only fine is a punishment. If imprisonment is a punishment, if imprisonment is a punishment case, compounding of offense is not allowed.

[00:08:53]Clear? Only fine related offenses compounding of offense is allowed. And this benefit you can claim once in 3 years. That means what? That means what?

[00:09:01]Once you claim this benefit next 3 years for similar offense, you can't claim this benefit. for similar offense. For different offense, you can claim compounding of offense. Getting my point? Once in 3 years means once you claim that benefit, next 3 years you are not allowed to claim that benefit for the similar offense. Residential status of a partner you need to check period of stay 120 days during the financial year.

[00:09:23]Next changes in the details any change in the partner's particulars then partner has to communicate with LP within 15 days like no name change, address change and LLP has to communicate with ROC within 30 days.

[00:09:36]Next, in case of infringement of trademark, owner of registered trademark has to file an application to central government within 3 years of LLP incorporation or name change. After 3 years, no need to communicate. It's already over.

[00:09:50]Next one. Foreign company. Foreign company. Foreign company is deemed to be an Indian company. If at least 50% of the paid up share capital, it may be equity or it may be preference or it may be both. Equity and preference.

[00:10:03]Out of paid up share capital 50% is held by Indian citizens. One or more Indian citizens, one or more Indian body corporates or combination of one or more Indian citizens and one or more Indian body corporates. Then that foreign company is deemed to be Indian company.

[00:10:16]And next foreign company filings with ROC. Total four forms are there. FC1, FC2, FC3, FC4. FC1 should be filed within 30 days of establishment of place of business with ROC CRC. ROC CRC whereas FC2, FC3, FC4 shall be filed with ROC having jurisdiction over New Delhi only FC1 filing should be done with ROC CRC. So FC1 time limit within 30 days of establishment of place of business if not complied. You know foreign company will have disadvantages of unable to file the cases like if you remember non-registration of partnership firm it can't sue the outsiders.

[00:10:57]Similarly foreign company also unregistered foreign company cannot show outsiders cannot claim set off cannot counter claim also. Next one alteration of about these doc alteration of these documents FC2 shall be filed within 30 days of such alteration and FC3 that is about financial statement shall be filed within 6 months of closure of financial year within 6 months of from closure of financial year. Yes, of course, for any special reason shown, ROC may grant extension of up to 3 months. And for financial year, generally April to March. But if you want to follow different period as a financial year, go and file an application with CG. After getting approval from CG, you can follow different period as financial year.

[00:11:33]Next, FC4 is all about annual returns.

[00:11:35]It should be filed within 60 days of closure of financial year. Documents to be enexed to with the prospectors. All the material contracts entered within the last two years. All the material contracts which are outside the ordinary course of business entered in the last two years you have to attach these documents.

[00:11:54]Clear? That's it. We'll meet again once again in another video.