Faltub,
The subject itself is not illegal to discuss, its only trading thats illegal in India. I think its in this forum because forex strategies can be applied to derivatives trading.
Mr Bhatia,
I have consulted the head of forex dealing department at Axis bank and forex expert Mr. D. T. Khilnani. Both of them have confirmed that its illegal.
Forex is not an offshore "investment", its a speculative "trade" ("trading" and "investment" have different meanings) and is hence not allowed. Not only INR but any currency pairs cannot be traded.
Mr Ravi,
Opening a foreign currency banking account is not allowed for individuals. You can confirm that with your tax consultant. Only companies with foreign offices are allowed an offshore bank acount.
How will you show the income/loss from forex on your tax return? Will you write that you have done a forex speculative transaction abroad? Believe me you will get your a$$ in jail.
Even after warning if you still want to trade, you can go ahead and trade, but don't complain if you get caught.
They are all fools of Axis Bank who lacks the knowledge. Go through several officers in a bank and all will give you different varying decisions. Then go to other bank and there also talk to several officers. I also did similar as you did and marked that 100% confidence was not found in anyone's answers. I have my own account in Axis Bank and challenged them in open to come out and debate on this matter. They were so much worried when I sent the complaint to their bank's corporate department and then they personally with Head of Bank too came to my house and begged in front of me to take back the complaint. I just don't talk like you, I believe in pratical results and evidence. So, I hereby confirm that forex trading is allowed if you have account in any country other then India. Because the jurisdiction of India cannot interfere niether the RBI can interfere with the matter which does not falls in their jurisdiction. As far as it concerns to having an online account with a broker in any country other then India, I am 100% percent sure that no one can stop any individual. RBI or you are not GOD who whatever says is final. Understood? So stop arguing and accept it. That's all !
This was about forex trading. Now let's talk of remittance which is different subject then forex trading subject. Remittance as per the Liberalized Remittance Scheme(LRS) is allowed. In LRS, there are several articles and sections under which you can remit money to foreign countries. Once you send money to foreign country then over there again the jurisdiction changes. After the remittance is once successfull , then RBI or Indian Law cannot interfere in the matter, as what ways and where is the money remitted from India was used. Once it's gone then whether you throw it anywhere or use at any place will only be applicable to the law of that particular jurisdiction and then niether Indian Constitution nor RBI is allowed to take any action in matters of foreign jurisdictions.
Here is an example of legal way of forex trading for Indian Citizens:
Open an online share trading or forex trading or currency trading account whose registered Regulatory office is based anywhere out side Indian Jurisdcition. Then open an International Personal Banking Account in the same country bank where you hold trading account and I would like to say that it is allowed as per the LRS scheme FAQ point number 36 mentioned on
http://www.rbi.org.in/scripts/FAQView.aspx?Id=53
Once you open a trading account AND also an international personal banking account in jurisdiction which falls outside India, then you can first of all send the money to you international personal banking account using the LRS scheme. And once it's remitted the powers of Indian jurisdiction is over. Then from that bank account simply transfer to your trading account which is also in the same country and does not falls in Indian Jurisdiction. This is the way and legal way to do forex trading using the LRS scheme and within legal limits.
Now tell me what would you like to say?
Sincerely
Kalpesh Sharma
World's Biggest Hacking Expert
Ahmedabad, Gujarat, India.
+91-79-25351208
Hi folks,