Registration of Payment Gateway Services in India

How Payment Gateway Works Image from here Mandatory Authorization As per the Payment and Settlement Act, 2007 (“Act”), such service provider will come under the definition of ‘system provider’ which means a person who operates an authorized payment system.[1] The Act, vide its Section 5(1) mandates authorization by RBI for commencing or carrying on a…

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Digital Encryption Laws in India

What is Encryption? Schedule V of the Information Technology (Certifying Authorities) Rules, 2000, defines encryption as- “The process of transforming plaintext data into an unintelligible form (cipher text) such that the original data either cannot be recovered (one-way encryption) or cannot be recovered without using an inverse decryption process (two-way encryption).” Cryptographic techniques are generally…

Tax Implications on Issuance of Compulsorily Convertible Preference Shares /Convertible Preference Shares

The issuance of Compulsorily Convertible Prefernce Shares (“CCPS“) and Convertible Preference Shares (“CPS“) and conversion thereof can give rise to two kinds of taxing events for the company issuing such shares. First is when the preference shares are simply redeemed either a higher market value or lower market value. Second is when such preference shares…

Requirements for Foreign Investment in NBFCs under RBI’s latest Master Circular, 2014

RBI Master Circular on Foreign Investment in India dated July 1, 2014 (“RBI Master Circular”) which lays down the legal requirements for foriegn direct investment in Non-banking Financial Companies (“NBFCs“).  As per this Master Circular, foreign investment into Non-Banking Finance Companies is allowed to the extent of 100% under the automatic route in only the following activities,…