The term ‘transfer’ is defined under FEMA, 1999 as "sale, purchase, acquisition, mortgage, pledge, gift, loan or any other form of transfer of right, possession or lien” {Section 2 (ze) of FEMA, 1999}.
The following share transfers are allowed without the prior approval of the Reserve Bank of India subject to the conditions laid down in FEMA 20:
a. Transfer by way of sale or gift between a person resident outside India (not being a NRI or an OCB) and any person resident outside India;
b. Prior Government approval shall be obtained for any transfer in case the company is engaged in a sector which requires Government approval.
c. Transfer of shares by way of sale or gift by a NRI to any NRI;
d. Prior Government approval shall be obtained for any transfer in case the company is engaged in a sector which requires Government approval
e. Transfer by way of gift by a person resident outside India to a resident;
f. Transfer by way of sale on a recognized stock exchange by a person resident outside India;
g. Transfer by way of sale or gift by a resident to a person outside India subject to conditions prescribed in Regulation 10 of FEMA 20;
