Mentoassociates.com – Legal Articles

1. A minor is a person below the age of 18 years. The Reserve Bank of India, on May 6, 2014, issued a notification regarding the opening and operating minors’ accounts.

2. A minor of any age can open a savings/fixed/recurring bank deposit account through his/her natural or legally appointed guardian.

3. Minors above the age of 10 years may be allowed to open and operate savings bank accounts independently, if they so desire. Banks may, however, fix limits in terms of age and amount up to which minors may be allowed to operate the deposit accounts independently.

4. Banks can also decide, in their own discretion, as to what minimum documents are required for opening of accounts by minors. Usually Pan Card details of the parent/ guardian are required. Also, the parent/guardian should have an account in the bank where they wish to open the minor’s account.

5. On attaining majority, the minor should confirm the balance in his/her account and if the account is operated by the natural guardian/legal guardian, fresh operating instructions and specimen signature of the erstwhile minor should be obtained and kept on record for all operational purposes.

6. Banks are free to offer additional banking facilities, such as, internet banking, ATM/debit card, cheque book facility etc., subject to the safeguards that minor accounts are not allowed to be overdrawn and that these always remain in credit.

7. The interest earned on the amount saved in minor bank accounts is taxable. Usually, the interest from a minor account is clubbed with the parent/guardian’s income and is considered taxable. Any income that accrues or is paid to a minor is added to the parent’s income under section 64(1A) and the parent will be taxed just like if it were their own income. However, if the interest earned is less than Rs. 1,500, then a tax exemption equal to the amount of interest earned is granted. If both the mother and father are earning, the income of the minor is added to the income of that parent whose income is greater.

1. What are the legal forms in which a foreign company or a foreigner can conduct business in India?

a. By incorporating a company under the Companies Act 1956, which may be a joint venture or a wholly owned subsidiary.
b. By opening an office of a foreign entity which may be a liasoning office, representative office, a project office or a branch office.

2. What are the two routes through which foreign investment is permitted in India?
a. Automatic route
b. Government route.

3. What is automatic route of Foreign Investment?
Under this up to 100% of investment is permitted in most of the activities and sectors. There is no requirement of any prior government approval for the investments in this route. The investor shall notify the Reserve Bank of India within 30 days of the receipt of the inward remittance and file the required documents with RBI within 30 days of issue of shares to the non resident investors.

4. Explain Government route of Foreign Investment?
These are sectors or activities where foreign investment requires prior government permission from Foreign Investment Promotion Board (FIPB). These include:
a. Sectors mentioned in Press Note I(2005 series) issued by the Government of India
b. Areas reserved for Small Scale sector.

5. Which are the areas where Foreign Direct Investment is not permitted in India?
A.   a. Retail Trading
b. Atomic Energy
c. Lottery business
d. Gambling and betting
e. Chit fund
f. Nidhi company
g. Agricultural or plantation activities
h. Housing and real estate business.
i. Transferable Developmental Rights.

6.  Can a foreigner repatriate the profits made in India?
Yes.

7. Can a foreigner do partnership or proprietorship concern business in India?
No. However NRIs and PIOs are permitted for the same. But the profits are not repatriable.