Master prompt
Source of funds tracing + FEMA / LRS / ODI compliance for EU investor visa
Document the complete source-of-funds chain for an EU investor visa application + map Indian-side outward-remittance compliance: RBI LRS, ODI route, 15CA/15CB, Schedule FA, Black Money Act exposure.
EUInvestor visaSource of fundsFEMALRSODI15CA 15CBSchedule FABlack Money Act
Document the complete source-of-funds chain for [CLIENT_NAME]'s EUR [INVESTMENT_AMOUNT_EUR] outward remittance to [TARGET_EU_COUNTRY] for investor-residence purposes. Trace the money from origin to investment vehicle. Map Indian-side compliance under FEMA + Income Tax Act + Black Money Act.
CLIENT SUMMARY
- Applicant: [CLIENT_NAME]
- Target country: [TARGET_EU_COUNTRY]
- Outward remittance required: EUR [INVESTMENT_AMOUNT_EUR]
- Primary source: [PRIMARY_FUND_SOURCE]
- Secondary source: None
- Indian tax returns filed: [INDIAN_TAX_YEARS_FILED]
- Intended structure: [REMITTANCE_STRUCTURE]
- CA firm: [CA_FIRM]
§1 - INDIAN REGULATORY FRAMEWORK (load-bearing)
(a) Foreign Exchange Management Act 1999 (FEMA) — governs all
outward remittances by Indian residents
(b) FEMA (Current Account Transactions) Rules 2000 + amendments
(c) Foreign Exchange Management (Overseas Investment) Rules 2022
— replaced 2004 Notification; governs Indian-corporate ODI
(d) RBI Master Direction on Liberalised Remittance Scheme — caps
USD 250,000 per Indian-resident individual per financial year
(April-March)
(e) RBI Master Direction on Foreign Investment in Overseas Joint
Venture / Wholly Owned Subsidiary — governs corporate ODI
(f) Income Tax Act 1961 — section 195 (TDS on payments to non-
residents); Form 15CA + 15CB (CA-certified tax-compliance
certificate for outward remittance)
(g) Black Money (Undisclosed Foreign Income and Assets) and
Imposition of Tax Act 2015 — penalties for undisclosed foreign
assets; Schedule FA in ITR
(h) Prevention of Money Laundering Act 2002 (PMLA) + UAPA
provisions for source-of-funds verification by AD bank
(i) FATCA + CRS — automatic exchange of financial-account
information with EU authorities (all 5 target countries
participate)
§2 - SOURCE-OF-FUNDS NARRATIVE (300-500 words)
Construct a chronological narrative from origin to investment.
Template — adapt to [PRIMARY_FUND_SOURCE]:
Para 1 — Origin
Where the capital originated. Example: "[CLIENT_NAME] founded
Sharma Tech Pvt Ltd in Mumbai in 2010. The company developed
enterprise SaaS for the Indian SME segment. In March 2024, the
company was acquired by [Acquirer Ltd] for an enterprise value of
INR 95 crore; [CLIENT_NAME]'s 60% shareholding yielded gross
proceeds of INR 57 crore."
Para 2 — Indian-side taxes paid
"Capital gains arising were classified as long-term capital gains
on unlisted equity under section 112A. Tax paid at 20% with
indexation benefit + 4% cess. Total Indian tax paid: INR 11.5
crore. Net proceeds post-tax: INR 45.5 crore (approx EUR 5 million
at INR-EUR rate of 91 as of March 2024)."
Para 3 — Banking + audit trail
"Net proceeds credited to [CLIENT_NAME]'s State Bank of India
account no. XXXX1234 in Mumbai on 23-March-2024. Funds remained
in INR fixed deposit + savings account; no intermediate transfers
to third-party accounts. Bank statements for the period
March 2024 to current date are attached at Annex C."
Para 4 — Compliance
"Sale was reported in [CLIENT_NAME]'s ITR for FY 2023-24 (filed
October 2024; ITR-V acknowledgment annexed). Capital gains tax
challan annexed. Schedule FA disclosed [CLIENT_NAME]'s prior
foreign-asset holdings, all consistent."
Para 5 — Remittance plan
"Of total proceeds of EUR 5 million, EUR [INVESTMENT_AMOUNT_EUR]
is being deployed to [TARGET_EU_COUNTRY] investor-residence
programme via [REMITTANCE_STRUCTURE]. Remaining funds remain
in India for ongoing personal + tax obligations."
§3 - DOCUMENTARY CHAIN (must be complete + apostilled +
sworn-translated)
Per [PRIMARY_FUND_SOURCE] category:
CATEGORY A: BUSINESS SALE (Indian Pvt Ltd / LLP)
A1. Share purchase agreement / asset sale agreement (signed,
dated)
A2. Acquirer's payment confirmation (bank-to-bank transfer
receipt)
A3. Form SH-7 (notice of capital changes filed with MCA)
A4. Income tax challan for capital gains tax paid
A5. CA-certified computation of capital gains
A6. ITR-V acknowledgment for the FY when sale occurred
A7. Bank statement showing inward receipt of proceeds + holding
A8. Pre-sale historical: company incorporation certificate,
annual returns, audited financial statements (3-5 years)
A9. Share certificates + shareholding history (Aadhaar-linked PAN
validation of seller)
CATEGORY B: INHERITANCE / GIFT
B1. Original Will (in Hindi / English) + apostilled translation
B2. Probate of Will (if applicable, from Indian District Court)
B3. Succession certificate (if no Will or contested)
B4. Death certificate of testator (apostilled)
B5. Family-relationship proof: birth certificates, marriage
certificates connecting [CLIENT_NAME] to deceased
B6. Property valuation report (if inherited assets liquidated)
B7. Sale deed / liquidation statement for inherited assets
B8. Bank statement showing inheritance proceeds received
B9. Tax treatment: inheritance is NOT taxed in India (section
56(2)(x) exception); but income from inherited assets is
taxable
CATEGORY C: SALARY + BONUS (long-term employment)
C1. Employment contract + offer letters + appointment letters
C2. Form 16 (TDS certificates) for last 5+ years
C3. ITRs for last 5+ years (ITR-V acknowledgments)
C4. Bank salary credits for last 5+ years (linked to employer)
C5. CA-certified income certificate
C6. Saving pattern: bank-statement showing accumulation of
savings out of salary + supporting evidence (FD investments,
mutual funds)
C7. If senior executive: employer's letter confirming bonuses,
ESOPs vested + exercised
C8. ESOP exercise records (if applicable)
CATEGORY D: EQUITY IPO / LISTED SHARE SALE
D1. Demat statements showing shareholding pre-IPO + post-IPO
D2. DRHP / RHP of company (relevant pages)
D3. Sale order confirmations from broker (sale post-IPO)
D4. Brokerage tax statements (Form 1099 equivalent)
D5. Capital gains tax challan
D6. CA-certified computation of LTCG (10% beyond INR 1 lakh
under section 112A)
D7. ITR + Schedule CG (capital gains)
CATEGORY E: REAL ESTATE SALE
E1. Sale deed (apostilled if non-English; sworn translation
target language)
E2. Original purchase deed / chain of title
E3. Encumbrance certificate
E4. Capital gains tax challan + Form 26QB (TDS by buyer)
E5. CA-certified computation (with indexation; section 54 /
54EC reinvestment if applicable)
E6. Bank statement showing inward sale proceeds
CATEGORY F: FAMILY GIFT
F1. Gift deed (registered, on stamp paper as per state law)
F2. Donor's source-of-funds documentation (full chain — donor
must establish their funds equally)
F3. Donor's bank statement showing outward gift
F4. [CLIENT_NAME]'s bank statement showing inward gift
F5. Tax treatment: gift from "relative" under section 56(2)(x)
is exempt; gifts from non-relatives > INR 50,000 are
taxable in recipient's hands
F6. Affidavit from donor confirming gift is unconditional
§4 - REMITTANCE STRUCTURE COMPLIANCE
For [REMITTANCE_STRUCTURE]:
STRUCTURE A: PERSONAL LRS — MULTI-FY
Cap: USD 250,000 per individual per FY
For EUR [INVESTMENT_AMOUNT_EUR] (assume EUR 500,000 ≈ USD 550,000):
- Year 1 (FY 2026-27): USD 250,000 = ~ EUR 230,000
- Year 2 (FY 2027-28): USD 250,000 = ~ EUR 230,000
- Year 3 (FY 2028-29): USD 70,000 = ~ EUR 65,000
- Total: ~ EUR 525,000 (multi-FY)
Documentation per remittance:
- Form A2 (application to AD bank for outward remittance)
- Form 15CA Part C (online filed via Income Tax portal)
- Form 15CB (CA-certified) - if remittance is taxable; if
non-taxable nature (e.g. capital), 15CB may not be needed but
AD bank may insist
- Source-of-funds documentation (per §3) supplied to AD bank
- AD bank's compliance review (PMLA + UAPA + STR/SAR checks)
- Confirmation of LRS limit utilisation in PAN
STRUCTURE B: FAMILY-MEMBER LRS POOLING
Multiple adult family members each utilise their USD 250,000
per FY. For family of 4 adults: USD 1,000,000/FY = ~ EUR 920,000.
- Each family member must independently establish source of funds
(cannot "borrow" the entitlement)
- Each files separate Form A2 + 15CA per remittance
- Aggregation must be carefully managed to avoid AD bank suspicion
of structuring (PMLA "smurfing" rule)
- Gift from parent / spouse to investor is permissible but must be
properly documented + may itself be subject to LRS by donor
STRUCTURE C: CORPORATE ODI (Overseas Direct Investment)
Indian corporate parent invests in EU subsidiary directly.
Permitted under Foreign Exchange Management (Overseas Investment)
Rules 2022:
- Cap: 400% of Indian parent's net worth (audited)
- Allowed: WOS or JV abroad
- Filing: Form FC (initial); APR (annual performance reports);
UIN (Unique Identification Number) issued by RBI via AD bank
- For Golden Visa purposes: target country authority must accept
investment via corporate vehicle (Portugal: yes via fund route;
Greece: yes; Italy: yes for company / startup; Malta MPRP:
typically requires individual; Latvia: yes for company route)
- Pros: enables larger capital deployment than LRS; corporate-
level tax efficiencies; AD bank diligence is corporate-grade
- Cons: ODI compliance overhead; investor-visa may require
individual investment per country
STRUCTURE D: MIXED (LRS + ODI)
Use ODI for bulk + LRS for personal residence-related expenses
in target country. Common for HNW Indian investors.
§5 - 15CA / 15CB MECHANICS
For each outward remittance:
15CA — applicant's self-declaration
- Part A: remittance ≤ INR 5 lakh — minimal disclosure
- Part B: remittance > INR 5 lakh + not chargeable to tax — no 15CB
required if specific exemption applies
- Part C: remittance > INR 5 lakh + chargeable to tax — 15CB MANDATORY
- Part D: remittance not chargeable to tax under specific rules
15CB — CA-certified
- Issued by [CA_FIRM] CA (Chartered Accountant in practice)
- Certifies nature of remittance, tax payable, applicable DTAA
article, TDS deduction
- For LRS personal capital remittance (no Indian tax payable on
capital outflow itself), 15CB may not be strictly required —
but AD banks often require it as standard practice
- Validity: 1 month from date of issue
Filing:
- Online on Income Tax e-filing portal
- Acknowledgment number required by AD bank to process remittance
- CA digitally signs 15CB
- Failure to file: penalty INR 1 lakh per default (section 271-I)
§6 - SCHEDULE FA + BLACK MONEY ACT EXPOSURE
[CLIENT_NAME] must report all foreign assets in Indian ITR:
Schedule FA (Foreign Assets) — disclosed annually:
- Foreign bank accounts: opened in target country
- Foreign immovable property: e.g. Greek apartment under
Golden Visa Route A
- Foreign equity / debt: e.g. Portuguese fund subscription
- Foreign cash value insurance
- Trusts / signatories
- Beneficial ownership in foreign entities
For each: peak balance during FY + opening + closing balances + value.
NON-DISCLOSURE consequences under Black Money Act 2015:
- Tax at 30% on undisclosed value + penalty 3x tax (90%)
- Prosecution: 3-10 years imprisonment
- No statute of limitations
For investor-visa investors, full disclosure is mandatory. The
foreign-asset matrix:
- Year of investment: opening balance NIL, closing balance =
investment value
- Subsequent years: peak balance + closing balance updated
- FATCA reporting: target-country financial institution will
auto-report to India anyway (CRS); discrepancy with Schedule FA
triggers enforcement
§7 - PMLA + AD BANK DUE DILIGENCE
AD bank (typically SBI, HDFC, ICICI, Axis, Standard Chartered India)
will run:
- Customer Due Diligence (CDD) per RBI Master Direction on KYC
- Enhanced Due Diligence (EDD) for high-value remittances + foreign
real-estate investment
- Suspicious Transaction Report (STR) filing to FIU-IND if
irregularities
- Sanctions screening (OFAC, UN, EU consolidated lists)
- Negative-media search on [CLIENT_NAME]
- Source-of-funds challenge — may require additional CA reports
Be prepared for:
- 2-4 weeks of bank review per remittance tranche
- Multiple rounds of clarification
- Possible referral to bank's compliance committee for amounts
over USD 1M aggregate
§8 - TARGET-COUNTRY AML / BANK ONBOARDING
In parallel, target-country bank will run:
- EU AMLD-compliant CDD
- Source-of-funds documentation in EU-bank-accepted format
- Sworn translations of Indian banking statements + tax records
- Sometimes requires interview / video KYC
Required: bridging certificate from Indian CA confirming compliance
with Indian outward-remittance rules + sworn translation of all
source-of-funds documents.
§9 - DOCUMENTATION SUMMARY (single-page master index for advogado /
avvocato / dikigóros)
Annex A — Identity (passport, birth, marriage, PCC)
Annex B — Indian tax compliance (last 5 years ITR + Form 16 + 26AS)
Annex C — Bank statements (last 12-24 months, all accounts)
Annex D — Source-of-funds primary (per Category)
Annex E — Source-of-funds secondary (if None applies)
Annex F — Form A2 + 15CA + 15CB (per remittance tranche)
Annex G — Schedule FA disclosure (current FY ITR)
Annex H — CA certificates: net worth, capital gains, income
Annex I — Investment-vehicle commitment / execution (target country)
Annex J — Target-country bank account opening + transfer confirmations
§10 - RISK FLAGS
□ Source of funds older than 7-10 years — older transactions may
have incomplete records; reconstruct via CA-certified history
□ Multiple intermediate transfers between accounts — increases
AD bank scrutiny; minimise
□ Cash deposits in source bank account before remittance —
Indian bank flags large cash deposits under PMLA; provide
explanation
□ Gifts from non-relative donors — taxable + heightened scrutiny
□ Real-estate sales without documentary chain back to original
purchase — risk of "benami" challenge
□ Tax disputes / assessment proceedings pending — may delay 15CB
issuance
□ FATCA / CRS reports lodged before Schedule FA — risk of
pre-emptive enforcement
□ Black Money Act assessment for any prior FY — disqualification
risk
End with: "DRAFT source-of-funds + FEMA / LRS / ODI compliance documentation — for Indian Chartered Accountant ([CA_FIRM]) + [TARGET_EU_COUNTRY]-admitted immigration lawyer review. The applicant remains responsible for Indian tax compliance + Schedule FA disclosure + Black Money Act compliance independently of any EU investor-visa grant. Sworn translation of Indian banking + tax records is mandatory for target-country bank onboarding. LRS multi-FY planning + ODI corporate route assessment must be done with CA + RBI-AD bank in advance — outward remittance cannot be 'fixed' post-facto. EU investor programmes increasingly enforce strict source-of-funds standards under EU AMLD + national AML laws; gaps in the documentary chain are a primary cause of refusal. Not legal advice. Not tax advice."Unlock the vault to see the full prompt