Forex Trading FAQ

sach007

Impatient Trader
#1
I am new to Forex trading. I trade generally in Nifty and doing well. But I want to know about Forex Trading. I have searched a lot but not got my answers.
So I thought to ask these questions which came to my mind and also many other members also might looking for it.

I request Senior members who have knowledge of the Subject to answer these for the benefit of Members.

1. Is As per Govt Of India's Rules Forex Trading is legal?

2. If legal then why there are no Indian Brokers are not in it as it is biggest volume in it?

3. How to open A/C for Forex trading in India? And how to pay for it?

4. What are the charges charged for Forex Trading.. also please mention Taxes also?

5. If it is legal then why there are no branches of any forex brokers everywhere like Equity/Commmodity/Currency brokers?


I request newbies to ask your questions so that everyone will get knowledge abt forex.
 
#2
I am new to Forex trading. I trade generally in Nifty and doing well. But I want to know about Forex Trading. I have searched a lot but not got my answers.
So I thought to ask these questions which came to my mind and also many other members also might looking for it.

I request Senior members who have knowledge of the Subject to answer these for the benefit of Members.

1. Is As per Govt Of India's Rules Forex Trading is legal?

2. If legal then why there are no Indian Brokers are not in it as it is biggest volume in it?

3. How to open A/C for Forex trading in India? And how to pay for it?

4. What are the charges charged for Forex Trading.. also please mention Taxes also?

5. If it is legal then why there are no branches of any forex brokers everywhere like Equity/Commmodity/Currency brokers?


I request newbies to ask your questions so that everyone will get knowledge abt forex.
My hand got bored from typing the same answers again and again but I can't help it:p:p

Here's a official Notice from RBI -
It has been observed that overseas foreign exchange trading has been introduced on a number of internet /electronic trading portals luring the residents with offers of guaranteed high returns based on such forex trading. The advertisements by these internet / online portals exhort people to trade in forex by way of paying the initial investment amount in Indian Rupees. Some companies have reportedly engaged agents who personally contact people to undertake forex trading/ investment schemes and entice them with promises of disproportionate / exorbitant returns. Most of the forex trading through these portals are done on a margining basis with huge leverage or on an investment basis, where the returns are based on forex trading. The public is being asked to make the margin payments for such online forex trading transactions through credit cards / deposits in various accounts maintained with banks in India. It is also observed that accounts are being opened in the name of individuals or proprietary concerns at different bank branches for collecting the margin money, investment money, etc. It is again reiterated that AD Category - I banks should exercise due caution and be extra vigilant in respect of the transactions that require residents to make margin payments for online forex trading transactions through credit cards / deposits in various accounts maintained with banks in India. It is clarified that any person resident in India collecting and effecting / remitting such payments directly /indirectly outside India would make himself/ herself liable to be proceeded against with for contravention of the Foreign Exchange Management Act (FEMA), 1999 besides being liable for violation of regulations relating to Know Your Customer (KYC) norms / Anti Money Laundering (AML) standards.

1) Officially Illegal

2) Above answer

3) Simply go to any forex broker website open an account. it is a normal procedure . fund with 3rd party - moneybookers, paypal, alertpay withdraw with the same

4) Charges and commission are different depending from broker to broker. Taxes you have to pay normally above 1.80 lakh annum then 30% ! but you cannot tell them that the income is from forex trading while IT filing! IF BIG amount is involved contact a CA

5) because it is illegal , From India you can trade only currency futures and that even only 4 indian pairs - gbp/inr, usd/inr, euro/inr and yen/inr
 
#4
My two cents. I really don't understand RBI ranting on about forex trading. Forex trading deals with OTC securities and is unregulated worldwide. As physical deliveries are not involved, I do not understand FEMA being called into question. Am I right? Please let me know
 

sach007

Impatient Trader
#5
Thanks a lot for the answers.
I don't understand then how these big companies like Alpari, FxCentral and many other are doing illegal business... they might know that this is illegal...still why no watchDog not jumping on them .... because now this has come to even small cities also.
 

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