{"id":2133,"date":"2026-09-02T15:00:00","date_gmt":"2026-09-02T09:30:00","guid":{"rendered":"https:\/\/blog.remitcircle.com\/?p=2133"},"modified":"2026-09-04T19:26:51","modified_gmt":"2026-09-04T13:56:51","slug":"p0004-return-of-indian-investment-abroad-in-subsidiaries-and-associates","status":"publish","type":"post","link":"https:\/\/blog.remitcircle.com\/purpose-codes\/p0004-return-of-indian-investment-abroad-in-subsidiaries-and-associates\/","title":{"rendered":"P0004: Return of Indian investment abroad in subsidiaries and associates"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"2133\" class=\"elementor elementor-2133\">\n\t\t\t\t<div class=\"elementor-element elementor-element-2cd393f5 e-flex e-con-boxed e-con e-parent\" data-id=\"2cd393f5\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-64d3db5b elementor-widget elementor-widget-text-editor\" data-id=\"64d3db5b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<h2><b>What is Purpose Code P0004?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">P0004 is used when an Indian company repatriates capital that was originally invested in a foreign subsidiary (a separately incorporated entity where the Indian parent holds majority control) or an associate (where the Indian entity holds a significant but not majority stake). This is one of the most common Capital Account purpose codes for Indian multinationals and ODI investors.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A foreign subsidiary is legally distinct from its Indian parent \u2014 it is incorporated in another country. When the Indian company sells its shareholding, receives a capital reduction payout, or winds down the subsidiary and brings the capital back to India, P0004 is the correct code. It sits within Group 00 (Capital Account) of the RBI purpose code framework.<\/span><\/p>\n<p><a href=\"\/category\/purpose-codes\/\" target=\"_blank\" rel=\"noreferrer noopener\" data-type=\"page\" data-id=\"351\">See all RBI purpose codes<\/a><\/p>\n<p>&nbsp;<\/p>\n<p><!-- \/wp:post-content --><\/p>\n<p><!-- wp:heading {\"className\":\"u005cu005cu005cu0022wp-block-headingu005cu005cu005cu0022\"} --><\/p>\n<h2><b>When to Use P0004<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Use P0004 when capital flows back to India from a foreign subsidiary or associate. Common scenarios:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">An Indian company selling its wholly-owned foreign subsidiary and repatriating the sale proceeds<\/span><\/li>\n<li><span style=\"font-weight: 400;\">A foreign subsidiary undergoing a capital reduction and returning a portion of share capital to its Indian parent<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Liquidation or winding up of a foreign subsidiary, with remaining assets being remitted back to India<\/span><\/li>\n<li><span style=\"font-weight: 400;\">An Indian company exiting a foreign joint venture or associate and receiving its proportionate capital back<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Partial divestment of a foreign subsidiary stake where the sale proceeds are repatriated to India<\/span><\/li>\n<\/ul>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- \/wp:list --><\/p>\n<p><!-- wp:quote --><\/p>\n<blockquote>\n<p><!-- wp:paragraph --><\/p>\n<p><strong>Quick check:<\/strong>Is the entity a separately incorporated company abroad (subsidiary or associate)? Use P0004. Is it an unincorporated extension of the Indian company (branch)? That&#8217;s P0003.<\/p>\n<p>&nbsp;<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<\/blockquote>\n<p><!-- \/wp:quote --><\/p>\n<p><!-- wp:heading --><\/p>\n<h2><strong><strong><strong>Wrong Code? Use These Instead<\/strong><\/strong><\/strong><\/h2>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:table --><\/p>\n<table>\n<tbody>\n<tr>\n<td>\n<p><b>If your money is from\u2026<\/b><\/p>\n<\/td>\n<td>\n<p><b>Correct code to use<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span style=\"font-weight: 400;\">Return of investment from foreign equity shares (portfolio, not subsidiary)<\/span><\/p>\n<\/td>\n<td>\n<p><b>P0001<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span style=\"font-weight: 400;\">Return of investment from foreign debt securities<\/span><\/p>\n<\/td>\n<td>\n<p><b>P0002<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span style=\"font-weight: 400;\">Return of capital from an overseas branch (not separately incorporated)<\/span><\/p>\n<\/td>\n<td>\n<p><b>P0003<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span style=\"font-weight: 400;\">Return of investment from foreign real estate<\/span><\/p>\n<\/td>\n<td>\n<p><b>P0005<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span style=\"font-weight: 400;\">Dividends from a foreign subsidiary<\/span><\/p>\n<\/td>\n<td>\n<p><b>P1407<\/b><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><br><\/p>\n<p><!-- \/wp:table --><\/p>\n<p><!-- wp:heading {\"className\":\"u005cu005cu005cu0022wp-block-headingu005cu005cu005cu0022\"} --><\/p>\n<h2><strong style=\"color: #1e1e1e;\"><strong>Documents to Keep Ready<\/strong><\/strong><\/h2>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:table --><\/p>\n<table>\n<tbody>\n<tr>\n<td>\n<p><b>Document<\/b><\/p>\n<\/td>\n<td>\n<p><b>Why you need it<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><b>Share purchase \/ sale agreement<\/b><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Confirms the transaction under which the subsidiary stake was divested<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><b>Board resolution for disinvestment<\/b><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Indian parent&#8217;s board approval for the exit transaction<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><b>Form ODI \/ disinvestment reporting<\/b><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">RBI\/AD bank reporting of the overseas direct investment exit<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><b>Foreign company&#8217;s valuation report<\/b><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Supports the transaction price and ensures arm&#8217;s length compliance<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><b>e-FIRA<\/b><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Official RBI-recognised proof of inward foreign remittance tagged P0004<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><b>KYC \/ company registration documents<\/b><\/p>\n<\/td>\n<td>\n<p><span style=\"font-weight: 400;\">Standard requirement \u2014 Indian parent company&#8217;s registration and PAN<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><br><\/p>\n<p><!-- \/wp:table --><\/p>\n<p><!-- wp:heading {\"className\":\"u005cu005cu005cu0022wp-block-headingu005cu005cu005cu0022\"} --><\/p>\n<h2><strong style=\"color: #1e1e1e;\">What is an e-FIRA \u2014 and Why Does It Matter?<\/strong><\/h2>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>An e-FIRA (Electronic Foreign Inward Remittance Advice) is the official proof that foreign money entered India. It confirms the nature and purpose of the inflow, which matters for tax treatment, FEMA compliance, and audit trails.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Your bank generates it automatically once the funds land. You can usually download it from your internet banking portal or request it at your Forex desk. The e-FIRA will reflect the correct purpose code, which your CA or accounts team will reference during filings.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:quote --><\/p>\n<blockquote>\n<p><!-- wp:paragraph --><\/p>\n<p>&nbsp;<strong>Did you know? <\/strong> Some banks take days to issue an e-FIRA. With Remit Circle, you can download yours instantly \u2014 at no charge \u2014 the moment your payment is credited. \u2192 Get your free e-FIRA via Remit Circle<\/p><p><strong style=\"color: rgb(30, 30, 30); letter-spacing: normal; font-size: 24px;\"><br><\/strong><\/p><p><strong style=\"color: rgb(30, 30, 30); letter-spacing: normal; font-size: 24px;\">Receive Inward Remittances Compliantly with Remit Circle<\/strong><\/p><\/blockquote>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Getting the purpose code right on an inward remittance isn&#8217;t just a formality \u2014 a mismatch can cause payment holds, RBI queries, or incorrect tax treatment. Remit Circle is built to handle this for you.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p><strong>Instant e-FIRA \u2014 <\/strong>Download your Foreign Inward Remittance Advice the moment funds are credited. No waiting on the bank, no Forex desk visits. Free.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p><strong>Correct purpose code, every time \u2014 <\/strong>Remit Circle flags the right code for your transaction type before the payment is processed, so there are no mismatch holds at the bank.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p><strong>Multi-currency support \u2014 <\/strong>Receive in USD, EUR, GBP, AUD and more. Funds settle directly into your Indian bank account at competitive rates.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p><strong>Compliance-ready records \u2014 <\/strong>Every transaction comes with a clean audit trail \u2014 purpose code, amount, date, counterparty \u2014 so you and your CA are always on the same page.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:pullquote --><\/p>\n<figure>\n<blockquote>\n<p><strong>Start receiving international payments with Remit Circle<\/strong><\/p>\n<p><cite>Open a free account in minutes. No minimum balance, no hidden fees. Get your e-FIRA instantly on every inward remittance.<br><strong>&nbsp;<a href=\"https:\/\/remitcircle.com\/authentication\/login\" target=\"_blank\" rel=\"noreferrer noopener\" data-type=\"link\" data-id=\"https:\/\/remitcircle.com\/authentication\/login\">Open your free Remit Circle account \u2192<\/a><\/strong><\/cite><\/p>\n<\/blockquote>\n<\/figure>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-ade69ef e-con e-atomic-element e-flexbox-base e-2db79ed \" data-id=\"ade69ef\" data-element_type=\"e-flexbox\" data-e-type=\"e-flexbox\" data-interaction-id=\"ade69ef\">\n    <div class=\"elementor-element elementor-element-4ace1fc e-con e-atomic-element e-flexbox-base e-4ace1fc-4095dd0 \" data-id=\"4ace1fc\" data-element_type=\"e-flexbox\" data-e-type=\"e-flexbox\" data-interaction-id=\"4ace1fc\">\n    <div class=\"elementor-element elementor-element-b3bca95 e-con e-atomic-element e-flexbox-base e-b3bca95-f2af265 \" data-id=\"b3bca95\" data-element_type=\"e-flexbox\" data-e-type=\"e-flexbox\" data-interaction-id=\"b3bca95\">\n    <div class=\"elementor-element elementor-element-4d02f35 e-con e-atomic-element e-flexbox-base e-4d02f35-0063a89 \" data-id=\"4d02f35\" data-element_type=\"e-flexbox\" data-e-type=\"e-flexbox\" data-interaction-id=\"4d02f35\">\n    <div class=\"elementor-element elementor-element-49c4f39 e-con e-atomic-element e-flexbox-base e-49c4f39-bea158a \" data-id=\"49c4f39\" data-element_type=\"e-flexbox\" data-e-type=\"e-flexbox\" data-interaction-id=\"49c4f39\">\n    <div class=\"elementor-element elementor-element-a366013 e-con e-atomic-element e-flexbox-base e-a366013-774c3b8 \" data-id=\"a366013\" data-element_type=\"e-flexbox\" data-e-type=\"e-flexbox\" data-interaction-id=\"a366013\">\n    \t\t\t<h2 data-interaction-id=\"9316952\" class=\"e-9316952-0f54ed6 e-heading-base\"><strong id=\"e-mser367n-mouqw3g\">Frequently Asked Questions<\/strong><br><\/h2>\n\t\t\t\t<div class=\"elementor-element elementor-element-38ba39b elementor-widget elementor-widget-n-accordion\" data-id=\"38ba39b\" data-element_type=\"widget\" data-e-type=\"widget\" data-settings=\"{&quot;n_accordion_animation_duration&quot;:{&quot;unit&quot;:&quot;ms&quot;,&quot;size&quot;:200,&quot;sizes&quot;:[]},&quot;default_state&quot;:&quot;expanded&quot;,&quot;max_items_expended&quot;:&quot;one&quot;}\" data-widget_type=\"nested-accordion.default\">\n\t\t\t\t\t\t\t<div class=\"e-n-accordion\" aria-label=\"Accordion. Open links with Enter or Space, close with Escape, and navigate with Arrow Keys\">\n\t\t\t\t\t\t<details id=\"e-n-accordion-item-5940\" class=\"e-n-accordion-item\" open>\n\t\t\t\t<summary class=\"e-n-accordion-item-title\" data-accordion-index=\"1\" tabindex=\"0\" aria-expanded=\"true\" aria-controls=\"e-n-accordion-item-5940\" >\n\t\t\t\t\t<span class='e-n-accordion-item-title-header'><div class=\"e-n-accordion-item-title-text\"> Q: What is RBI purpose code P0004? <\/div><\/span>\n\t\t\t\t\t\t\t<span class='e-n-accordion-item-title-icon'>\n\t\t\t<span class='e-opened' ><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-minus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h384c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg><\/span>\n\t\t\t<span class='e-closed'><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-plus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H272V64c0-17.67-14.33-32-32-32h-32c-17.67 0-32 14.33-32 32v144H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h144v144c0 17.67 14.33 32 32 32h32c17.67 0 32-14.33 32-32V304h144c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg><\/span>\n\t\t<\/span>\n\n\t\t\t\t\t\t<\/summary>\n\t\t\t\t<div role=\"region\" aria-labelledby=\"e-n-accordion-item-5940\" class=\"elementor-element elementor-element-962aa1a e-con-full e-flex e-con e-child\" data-id=\"962aa1a\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<p class=\"e-paragraph-base\" data-interaction-id=\"36e0e27\">P0004 is used when an Indian company repatriates capital from a foreign subsidiary or associate a separately incorporated entity abroad in which the Indian entity held a direct investment under the ODI framework. It covers sale proceeds, capital reductions, and liquidation proceeds from such entities.<br><\/p>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/details>\n\t\t\t\t\t\t<details id=\"e-n-accordion-item-5941\" class=\"e-n-accordion-item\" >\n\t\t\t\t<summary class=\"e-n-accordion-item-title\" data-accordion-index=\"2\" tabindex=\"-1\" aria-expanded=\"false\" aria-controls=\"e-n-accordion-item-5941\" >\n\t\t\t\t\t<span class='e-n-accordion-item-title-header'><div class=\"e-n-accordion-item-title-text\"> Q: What is the difference between P0004 and P0001? <\/div><\/span>\n\t\t\t\t\t\t\t<span class='e-n-accordion-item-title-icon'>\n\t\t\t<span class='e-opened' ><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-minus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h384c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg><\/span>\n\t\t\t<span class='e-closed'><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-plus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H272V64c0-17.67-14.33-32-32-32h-32c-17.67 0-32 14.33-32 32v144H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h144v144c0 17.67 14.33 32 32 32h32c17.67 0 32-14.33 32-32V304h144c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg><\/span>\n\t\t<\/span>\n\n\t\t\t\t\t\t<\/summary>\n\t\t\t\t<div role=\"region\" aria-labelledby=\"e-n-accordion-item-5941\" class=\"elementor-element elementor-element-b7b8a81 e-con-full e-flex e-con e-child\" data-id=\"b7b8a81\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<p class=\"e-paragraph-base\" data-interaction-id=\"c59e817\">P0001 is for returning capital from overseas portfolio equity investments typically shares in listed companies or minority stakes that do not constitute direct investment. P0004 is for Overseas Direct Investment exits subsidiaries and associates where the Indian company has a controlling or significant stake under the ODI framework.<br><\/p>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/details>\n\t\t\t\t\t\t<details id=\"e-n-accordion-item-5942\" class=\"e-n-accordion-item\" >\n\t\t\t\t<summary class=\"e-n-accordion-item-title\" data-accordion-index=\"3\" tabindex=\"-1\" aria-expanded=\"false\" aria-controls=\"e-n-accordion-item-5942\" >\n\t\t\t\t\t<span class='e-n-accordion-item-title-header'><div class=\"e-n-accordion-item-title-text\"> Q: What RBI reporting is required when repatriating under P0004? <\/div><\/span>\n\t\t\t\t\t\t\t<span class='e-n-accordion-item-title-icon'>\n\t\t\t<span class='e-opened' ><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-minus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h384c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg><\/span>\n\t\t\t<span class='e-closed'><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-plus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H272V64c0-17.67-14.33-32-32-32h-32c-17.67 0-32 14.33-32 32v144H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h144v144c0 17.67 14.33 32 32 32h32c17.67 0 32-14.33 32-32V304h144c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg><\/span>\n\t\t<\/span>\n\n\t\t\t\t\t\t<\/summary>\n\t\t\t\t<div role=\"region\" aria-labelledby=\"e-n-accordion-item-5942\" class=\"elementor-element elementor-element-07034eb e-con-full e-flex e-con e-child\" data-id=\"07034eb\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<p class=\"e-paragraph-base\" data-interaction-id=\"8d84cb0\">Under FEMA and the ODI regulations, the Indian company must report the disinvestment of a foreign subsidiary or associate to the RBI through its Authorised Dealer bank. This typically involves filing a Form ODI reporting the exit, the repatriated amount, and the updated overseas investment position. Failure to report can attract FEMA penalties.<br><\/p>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/details>\n\t\t\t\t\t\t<details id=\"e-n-accordion-item-5943\" class=\"e-n-accordion-item\" >\n\t\t\t\t<summary class=\"e-n-accordion-item-title\" data-accordion-index=\"4\" tabindex=\"-1\" aria-expanded=\"false\" aria-controls=\"e-n-accordion-item-5943\" >\n\t\t\t\t\t<span class='e-n-accordion-item-title-header'><div class=\"e-n-accordion-item-title-text\"> Q: Do I need approval from the foreign country's regulators before repatriating under P0004? <\/div><\/span>\n\t\t\t\t\t\t\t<span class='e-n-accordion-item-title-icon'>\n\t\t\t<span class='e-opened' ><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-minus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h384c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg><\/span>\n\t\t\t<span class='e-closed'><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-plus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H272V64c0-17.67-14.33-32-32-32h-32c-17.67 0-32 14.33-32 32v144H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h144v144c0 17.67 14.33 32 32 32h32c17.67 0 32-14.33 32-32V304h144c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg><\/span>\n\t\t<\/span>\n\n\t\t\t\t\t\t<\/summary>\n\t\t\t\t<div role=\"region\" aria-labelledby=\"e-n-accordion-item-5943\" class=\"elementor-element elementor-element-22fc799 e-flex e-con-boxed e-con e-child\" data-id=\"22fc799\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t\t<p class=\"e-paragraph-base\" data-interaction-id=\"0f9edd9\">Yes, in many cases. Foreign jurisdictions may require regulatory approval before a company can be liquidated or before shares can be transferred to a non-resident. Local legal counsel in the host country should advise on the process. Host country approval is typically a prerequisite before the SWIFT transfer back to India can be initiated.<br><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/details>\n\t\t\t\t\t\t<details id=\"e-n-accordion-item-5944\" class=\"e-n-accordion-item\" >\n\t\t\t\t<summary class=\"e-n-accordion-item-title\" data-accordion-index=\"5\" tabindex=\"-1\" aria-expanded=\"false\" aria-controls=\"e-n-accordion-item-5944\" >\n\t\t\t\t\t<span class='e-n-accordion-item-title-header'><div class=\"e-n-accordion-item-title-text\"> Q: How are subsidiary divestment proceeds under P0004 taxed in India? <\/div><\/span>\n\t\t\t\t\t\t\t<span class='e-n-accordion-item-title-icon'>\n\t\t\t<span class='e-opened' ><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-minus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h384c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg><\/span>\n\t\t\t<span class='e-closed'><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-plus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H272V64c0-17.67-14.33-32-32-32h-32c-17.67 0-32 14.33-32 32v144H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h144v144c0 17.67 14.33 32 32 32h32c17.67 0 32-14.33 32-32V304h144c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg><\/span>\n\t\t<\/span>\n\n\t\t\t\t\t\t<\/summary>\n\t\t\t\t<div role=\"region\" aria-labelledby=\"e-n-accordion-item-5944\" class=\"elementor-element elementor-element-c2cdd82 e-flex e-con-boxed e-con e-child\" data-id=\"c2cdd82\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t\t<p class=\"e-paragraph-base\" data-interaction-id=\"610df96\">Capital gains tax may apply on the difference between the original cost of investment and the sale\/repatriation proceeds. The applicable rate depends on the holding period and whether the investment is in a tax treaty country. Double taxation avoidance agreements (DTAAs) between India and the foreign country may provide relief. Your CA should compute the tax liability.<br><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/details>\n\t\t\t\t\t\t<details id=\"e-n-accordion-item-5945\" class=\"e-n-accordion-item\" >\n\t\t\t\t<summary class=\"e-n-accordion-item-title\" data-accordion-index=\"6\" tabindex=\"-1\" aria-expanded=\"false\" aria-controls=\"e-n-accordion-item-5945\" >\n\t\t\t\t\t<span class='e-n-accordion-item-title-header'><div class=\"e-n-accordion-item-title-text\"> Q: Can a foreign subsidiary's accumulated retained earnings be repatriated under P0004? <\/div><\/span>\n\t\t\t\t\t\t\t<span class='e-n-accordion-item-title-icon'>\n\t\t\t<span class='e-opened' ><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-minus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h384c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg><\/span>\n\t\t\t<span class='e-closed'><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-plus\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M416 208H272V64c0-17.67-14.33-32-32-32h-32c-17.67 0-32 14.33-32 32v144H32c-17.67 0-32 14.33-32 32v32c0 17.67 14.33 32 32 32h144v144c0 17.67 14.33 32 32 32h32c17.67 0 32-14.33 32-32V304h144c17.67 0 32-14.33 32-32v-32c0-17.67-14.33-32-32-32z\"><\/path><\/svg><\/span>\n\t\t<\/span>\n\n\t\t\t\t\t\t<\/summary>\n\t\t\t\t<div role=\"region\" aria-labelledby=\"e-n-accordion-item-5945\" class=\"elementor-element elementor-element-8ccd014 e-flex e-con-boxed e-con e-child\" data-id=\"8ccd014\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t\t<p class=\"e-paragraph-base\" data-interaction-id=\"76508fc\">Accumulated profits of a foreign subsidiary, if distributed as dividends, would be classified under P1407 (dividend income). If the subsidiary is being wound up and distributing its entire net assets (including retained earnings) as a liquidation distribution, that would typically be under P0004. The characterisation depends on the legal form of the distribution consult your CA and AD bank.<br><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/details>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\n<\/div>\n\n<\/div>\n\n<\/div>\n\n<\/div>\n\n<\/div>\n\n<\/div>\n\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"You are repatriating capital back to India from a foreign subsidiary or associate company in which your Indian entity held an investment\nIndian parent companies, holding companies, and investors that made direct investments in foreign subsidiaries or associates under the ODI framework\nInward remittance (money coming into India)","protected":false},"author":260895650,"featured_media":2134,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_wpcom_ai_launchpad_first_post":false,"csco_display_header_overlay":false,"csco_singular_sidebar":"","csco_page_header_type":"","csco_page_load_nextpost":"","csco_page_reading_time":"","csco_page_toc_navigation":"","csco_post_video_location":[],"csco_post_video_location_hash":"","csco_post_video_url":"","csco_post_video_bg_start_time":0,"csco_post_video_bg_end_time":0,"csco_post_video_bg_volume":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1384],"tags":[],"class_list":["post-2133","post","type-post","status-publish","format-standard","has-post-thumbnail","category-purpose-codes","cs-entry","cs-video-wrap"],"jetpack_publicize_connections":[],"jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/phhXOC-yp","jetpack-related-posts":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/blog.remitcircle.com\/wp-content\/uploads\/2026\/09\/Purpose_Code_32-Repatriation_of-P0004.png?fit=1200%2C800&ssl=1","_links":{"self":[{"href":"https:\/\/blog.remitcircle.com\/wp-json\/wp\/v2\/posts\/2133","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.remitcircle.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.remitcircle.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.remitcircle.com\/wp-json\/wp\/v2\/users\/260895650"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.remitcircle.com\/wp-json\/wp\/v2\/comments?post=2133"}],"version-history":[{"count":11,"href":"https:\/\/blog.remitcircle.com\/wp-json\/wp\/v2\/posts\/2133\/revisions"}],"predecessor-version":[{"id":2231,"href":"https:\/\/blog.remitcircle.com\/wp-json\/wp\/v2\/posts\/2133\/revisions\/2231"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.remitcircle.com\/wp-json\/wp\/v2\/media\/2134"}],"wp:attachment":[{"href":"https:\/\/blog.remitcircle.com\/wp-json\/wp\/v2\/media?parent=2133"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.remitcircle.com\/wp-json\/wp\/v2\/categories?post=2133"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.remitcircle.com\/wp-json\/wp\/v2\/tags?post=2133"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}