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I wish to create two separate irrevocable specific private trusts for two of my minor granddaughters who are living in the UK with their NRI parents. My granddaughters do not have any other income. Since they are NRIs, do I need to obtain any permission from the RBI for creation of the trusts? If so, please guide me on how to get the same.
MP Swamy
Provision for creation of private trust in India by a resident Indian for NRI family members (beneficiaries) is not in the Income tax Act.
The Reserve Bank of India (RBI) has also not provided any guidance on the creation of private trust for NRI family members in India. You may, therefore, seek legal advice and consult the RBI for creation of private trust in India for NRI family members.
We would like to add that any payment/remittance of the funds overseas would be covered under foreign exchange regulations and may require approval from the RBI.
The writer is Partner, Deloitte India.
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