Section 10(5) in Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017
(5)A person resident in India holding capital instruments or units of an Indian company or an NRI or an OCI an eligible investor under Schedule 4 of these Regulations holding capital instruments or units of an Indian company on a non-repatriation basis may transfer the same to a person resident outside India by way of gift with the prior approval of the Reserve Bank, in the manner prescribed, and subject to the following conditions:(a)The donee is eligible to hold such a security under relevant schedules of these Regulations;(b)The gift does not exceed 5 percent of the paid up capital of the Indian company/ each series of debentures/ each mutual fund scheme;Explanation: The 5 percent will be on cumulative basis by a single person to another single person(c)The applicable sectoral cap in the Indian company is not breached;(d)The donor and the donee shall be 'relatives' within the meaning in section 2(77) of the Companies Act, 2013;(e)The value of security to be transferred by the donor together with any security transferred to any person residing outside India as gift during the financial year does not exceed the rupee equivalent of USD50,000;(f)Such other conditions as considered necessary in public interest by the Reserve Bank;
