External Commercial Borrowings (ECB) in Indian Rupees

The RBI in order to provide greater flexibility for structuring of ECB arrangements, has further  revised Foreign Exchange Management (Borrowing or lending in foreign exchange) Regulations, 2000.  Accordingly, now the recognised non- resident ECB lenders may extend loans in Indian Rupees subject  to the following conditions:

  1. The lender should mobilise Indian Rupees through swaps undertaken with an Authorised Dealer  Category-I bank in India
  2. The ECB contract should comply with all other conditions applicable to the automatic and  approval routes as the case may be
  3. The all-in-cost of such ECBs should be commensurate with prevailing market conditions

Reserve Bank of India (RBI) allows issue of equity shares under the FDI scheme against legitimate  dues

The RBI has reviewed the extant guidelines for issue of shares/convertible debentures under the  automatic route and permitted companies to issue equity shares to non- resident investors under the  foreign direct investment policy (FDI) against any other funds payable by the investee company,  remittance of which does not require prior permission of the Government of India or RBI under FEMA,  1999 or any rules/regulations framed or directions issued thereunder. However, this is subject to  compliance with the terms and conditions of the FDI policy, including sectoral caps, pricing  guidelines, etc., and also applicable tax laws.

Earlier, an Indian company could issue shares to a non- resident against payment obligations only  in certain circumstances, in relation to “lump-sum technical know- how fee, royalty, External  Commercial Borrowings (other than import dues deemed as ECB or Trade Credit as per RBI guidelines)  and import payables of capital goods by units in Special Economic Zones” subject to applicable  conditions.

Amendment to Corporate Social Responsibility Rules, 2014 (CSR Rules)

Now, expenditure on administrative overheads shall also form part of the cap of 5% of total  expenditure that a company can spend towards building CSR capacities of their own personnel and  that of their implementing agencies. The CSR Rules have been amended to this effect.

Donations under Prime Minister’s National Relief Fund

Contributions to the Prime Minister’s National Relief Fund have been notified for 100% deduction  from taxable income under Section 80G of the Income Tax Act, 1961.