Attention! - Forex trading is illegal in India!

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Easyforex

New Member
#161
#161
Dear All,

What I have seen they do not wish to allow residents to export their funds for forex investment for two reasons 1. to keep the money in india and 2. they were a few forex companies promising large returns which people were scammed into hence the RBI bought out a warning but not a law.

Can someone send me the RBI Link where it states that margin or forex trading is actually illegal online with international companies or is it only in India they cannot trade? Similar to Cypriots we cannot have casinos here but we can go to North Cyprus and gamble or we can open online casinos.

Kind regards,
 
ShivaniArora

ShivaniArora

New Member
#162
#162
Yes, forex is illegal in India, even with companies claiming to have NBFC License. This was confirmed to me by FED Help department of RBI.

I can forward the email from RBI to anyone who needs clarification on NBFC License.
 
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fxgood

Well-Known Member
#164
#164
still there are many semi legal ways to trade forex from India and both depositing funds and with drawal will be 100% legal, and there won't be any voilation of fema or any sort of rbi guide lines, but this works out only for bigger funds not small size individual traders.
 
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prakash.jj

New Member
#165
#165
fxgood said:
still there are many semi legal ways to trade forex from India and both depositing funds and with drawal will be 100% legal, and there won't be any voilation of fema or any sort of rbi guide lines, but this works out only for bigger funds not small size individual traders.
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I was in the process of opening an account with FxCentral..... They accept money in Indian Rupees to axis bank and then they will fund the account....

Is it still illegal to fund like that?
 
Piratetrader

Piratetrader

Active Member
#166
#166
buccas13 said:
I do no think there is anyway one needs to panic. One needs to properly interpret the statement written in the update.

"Remittance for trading in foreign exchange abroad"

Indian Government is already trying hard to bring back the black money abroad. All this is in wake of that. This move is to prevent tax evasion.

If one remits money abroad to trade in forex, what happens is money goes in jurisdiction beyond Indian govt. the person may or may not disclose the profit for computing his tax liability in India. Besides trying to find out retail accounts of small balances is a very tedious job. Besides it is possible that you may remit a portion of that profit using hawala channel too.

Trading in foreign exchange can be done if you open an account in a broker having office in India. This way your accounting of Profit and Loss will happen in India.

Often you will read that trading is illegal and if caught by RBI you will land in Jail. This is false. You will not land in Jail. FERA the earlier law treated forex offense as criminal in nature but FEMA it treats forex offense as civil in nature. So you will have to pay penalty but you will never land up in jail.

EG:

Mr A sends 500 abroad for forex trading and he earns profit of 4500. Total account balance is 5000. Now, he gets caught by RBI. So what will happen is:

The amount considered for offense is 500. This will be the amount used by RBI when filing case under FEMA.

Now, If you donot declare your profits from forex in IT filing, then your 4500 will become illegal. RBI wont but if IT dept caught you then they will refer to 4500 for filing a case against MR A.
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if you do not pay the penalty u will land up in jail!
 
hyraj

hyraj

Member
#167
#167
ShivaniArora said:
Yes, forex is illegal in India, even with companies claiming to have NBFC License. This was confirmed to me by FED Help department of RBI.

I can forward the email from RBI to anyone who needs clarification on NBFC License.
Click to expand...
Thanks for valuable info Shivani....
As to post the mail ID in traderji is not allowed, y don u psot the image of mail in the same thraed...?
One more qstn....besides that i heard thousands are trading FX, how, m whispered.
U can mail me on 27hp at the in dot com.

Thanks n Regards
~~hyraj
 
K

kurk

New Member
#168
#168
Hello fellow traders.
I was going through the threads on forex trading in india and though they are very informative, i still am confused.

I have gone through the RBI circular regarding the LRS scheme, which clearly says that one cannot remitt money for foreign exchange trading but ofcourse there are ways to send money to most of the brokers via cards and moneybookers etc.
So i guess it isnt a big problem for funding the account.
The only concern that i have is that most of these brokers would fund your card back only with the amount you deposited in-case u did a card transaction and in other cases they only allow for a wire transfer.
In that case does the bank pose a problem since the inward remittance would clearly mention money coming from a exchange broker and what kind of tax liability would one see on this incoming remittance.

:) kurk.
 
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praveen062

New Member
#169
#169
Forex Trading Is Allowed india even by Individuals.They Can Start Trading in Currency Markets through authorised Brokers.
As Per the FEMA Act its ill legal to hold More Amount of Non India Currency.
 
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