Forex trading in India

[howardroark]

Hello Howardroark..thanks for all of details....
Could you please also explain how this Cash deposit and Withdraw works ?

For funding the account ... Deposit cash ... to the broker's current account or account of one of their employees (I have done it ... depositing to an employee bank account) .... Accounts can be in any bank, though predominantly, it is ICICI, AXIS, HDFC ................
When I want to withdraw, the withdrawn amount is deposited in cash to any bank account, which is IN MY NAME (this is important) Bank account has to be in the name of the FX trading account holder ....

 

[NJ23]

For funding the account ... Deposit cash ... to the broker's current account or account of one of their employees (I have done it ... depositing to an employee bank account) .... Accounts can be in any bank, though predominantly, it is ICICI, AXIS, HDFC ................
When I want to withdraw, the withdrawn amount is deposited in cash to any bank account, which is IN MY NAME (this is important) Bank account has to be in the name of the FX trading account holder ....

Isn't that very thing disallowed by RBI? Transferring cash for FX trading? What currecny are you transferring it in? INR? And who bears the risk of conversion to USD(which is definitely not allowed as per my knowledge)?
Most importantly how does one justify the cash deposits(on withdrawals) in the ITR(I read in other thread about how you do it, but what can be the way to show the deposits in the ITR if you do only FX trading)? Can you shed a light on these things?

 

[Ikima]

argg my previous post still pending for moderator approve :\

question 1: @howardroark, now i understand is that, Indian people having problem only to deposit and withdrawing money. well in my case it's not an issue. coz i using e-wallet. now question is in case if i earned a huge amount of money and withdraw to bank account is done. bank also don't question anything as they don't know if it's come from forex or not. but what will i tell when filling tax return if earning is good amount?

question 2: many people saying NRI can do overseas currency trade. now if i become NRI and do trading can i send that money direct to my Indian account? or it should be in my temporary country bank account then send to Indian bank account. say i start trading from India and planning to withdraw money after 6~8 years later. assume i investing 2~3laks per year and after 6~8 years it become 50~60 laks. last year of withdrawal i become NRI and send all money to my bank account. again what to tell in tax return filling?

 

[howardroark]

Isn't that very thing disallowed by RBI? Transferring cash for FX trading? What currecny are you transferring it in? INR? And who bears the risk of conversion to USD(which is definitely not allowed as per my knowledge)?
Most importantly how does one justify the cash deposits(on withdrawals) in the ITR(I read in other thread about how you do it, but what can be the way to show the deposits in the ITR if you do only FX trading)? Can you shed a light on these things?

You are right that converting INR to USD is illegal ...
I deposit INR only. It is converted into USD using E Currency wallet, for which brokers charge 2 Re / USD.
My Auditor takes care of filing my ITR ... That is not my area of expertise ...
Hope I have answered yr doubts ...
Feel free to ask any other doubts ...

 

[howardroark]

argg my previous post still pending for moderator approve :\

question 1: @howardroark, now i understand is that, Indian people having problem only to deposit and withdrawing money. well in my case it's not an issue. coz i using e-wallet. now question is in case if i earned a huge amount of money and withdraw to bank account is done. bank also don't question anything as they don't know if it's come from forex or not. but what will i tell when filling tax return if earning is good amount?

question 2: many people saying NRI can do overseas currency trade. now if i become NRI and do trading can i send that money direct to my Indian account? or it should be in my temporary country bank account then send to Indian bank account. say i start trading from India and planning to withdraw money after 6~8 years later. assume i investing 2~3laks per year and after 6~8 years it become 50~60 laks. last year of withdrawal i become NRI and send all money to my bank account. again what to tell in tax return filling?

1: Get hold of a good auditor. He will take care of filing yr ITR. You do not have to worry about it. They will have their own ways ...

2: NRI is a status given according to residency, not for sending money. India has Double tax treaty (kinda like that) with few countries ... where in you have to pay tax only once, in the country where you have earned ... Your auditor should advice you on that ...

If you residing out side India, you can send amount, any time, any number of times ... there is no ceiling on that ...

you can trade from any part of the world ... But while you withdraw, the amount will come to the bank account, in the country, where you originally opened your trading account, irrespective of where you stay at present ...

 

[Ikima]

thank you so much for clearing all of my doubt. so if i want to do overseas currency trade, step should be like this way:
1. so basically i make money from trading.
2. send money to bank from e-wallet.
3. bank cannot find the source of money.
4. find a good auditor and tell him that money is made from forex, but he have to made up something the source of earning so that gvt cannot make any problem? will it work smoothly?
===============
what about prop company, your said prop trading company can do overseas forexy trading. cannot any individual open prop company and start trading? what is the requirement?
can any prop company do trading in hotforex/instaforex etc?

 

[howardroark]

thank you so much for clearing all of my doubt. so if i want to do overseas currency trade, step should be like this way:
1. so basically i make money from trading.
2. send money to bank from e-wallet.
3. bank cannot find the source of money.
4. find a good auditor and tell him that money is made from forex, but he have to made up something the source of earning so that gvt cannot make any problem? will it work smoothly?
===============
what about prop company, your said prop trading company can do overseas forexy trading. cannot any individual open prop company and start trading? what is the requirement?
can any prop company do trading in hotforex/instaforex etc?

1. You can make money by any means ...
2. You can transfer amount from bank to bank account ... not necessarily from e wallet ...
3. If you have earned by FX trading, being NRI, you shud hv already paid tax there ... You do you need auditor here?
4. I think you are confused about citizenship and FX trading ......... and taxation (even before earning? ...

If you stay in India, open a fx trading account from India, and withdraw profits in India ... to an Indian Bank ... You need to pay tax here and you need an auditor ...........

Prop companies have forex reserves in their respective countries ... for them it is their own local currency ... They might have office in India ... But the fx trading accounts are opened in their respective countries ... only trading happens in India ... Do not get confused about account opening and trading .... As you can open a bank account and use the ATM card anywhre in the world, once you open a fx trading account, you can trade anywhere ...
You can go abroad, open a prop trading ... if you have that kind of money, that is .... say about 25 million USD ....
and with that kind of money to trade ... Prop companies trade with bigger and better brokers ... have you heard about Dukascopy?

 

[Ikima]

i am not NRI. that was just a question. i am trying to understand if there is any safe way to do overseas currency trade being Indian.

If you stay in India, open a fx trading account from India, and withdraw profits in India ... to an Indian Bank ... You need to pay tax here and you need an auditor ...........

i got confused again. other than e-wallet if Indian bank account find that money came from a overseas forex broker will not bank ban account?

again there question come for tax return. if overseas forex ban in India how auditor will audit my forex trading report? yeah i am thinking about taxation before earning, it will be better if i understand all properly before i jump, even there is very less chance to be successful.

i never heard of Dukascopy. please instruct me how can i do overseas currency trading being an Indian.

 

[howardroark]

i am not NRI. that was just a question. i am trying to understand if there is any safe way to do overseas currency trade being Indian.



i got confused again. other than e-wallet if Indian bank account find that money came from a overseas forex broker will not bank ban account?

again there question come for tax return. if overseas forex ban in India how auditor will audit my forex trading report? yeah i am thinking about taxation before earning, it will be better if i understand all properly before i jump, even there is very less chance to be successful.

i never heard of Dukascopy. please instruct me how can i do overseas currency trading being an Indian.

Prioritize your doubts first .... You can not go to hotel and say I need some thing to eat ............
If you are not an NRI ... if u cnt b an NRI .... you have 3 options to trade FX ...
1. Bank to bank online transfer ... As you will be transferring amount to the bank account of either a front end company or the bank account of an employee, there is no chance of anyone (bank/RBI/FEMA) knowing the reason for the online transfer .... same logic for the withdrawal as well ...
2. Cash deposit to the bank account of either a front end company or the bank account of an employee, there is no chance of anyone (bank/RBI/FEMA) knowing the reason for the cash deposit .... same logic for the withdrawal as well ...
3. If you are planning for higher deposits and withdrawals, use Angadiya's

Lastly .... "WORRY ABOUT TAXATION ... ITR ... ONLY IF YOU ARE PLANNING TO OPEN AN ACCOUNT IN EXCESS OF 10,000$" .... If not worry, more about trading ... strategies ... TF's ... making profit ...

Regards,

 

[stoch]

can any prop company do trading in hotforex/instaforex etc?

There are some prop trading companies in Hotforex PAMMs (personally hold some hundreds of bucks under Bihu Capital PAMM account)