Legal Question in Investment Law in India

I have following questions related to investment law and foreign exchange applicable for Indian residents who are abroad:

1. FEMA 1999 Section 2 defines "foreign security". Would shares of foreign companies such as Cisco or IBM qualify as "foreign security"? My confusion arises from the last clause in the definition which say "..., but where redemption or any form of return such as interest or dividends is payable in Indian currency". I would think that since shares of Cisco and IBM are not redeemable in Indian currency and they don't pay interest or dividends in Indian currency, they do not qualify as "foreign security" under the FEMA definition.

2. FEMA 1999 Section 2 defines "person resident in India" and also provides exemptions for persons residing in India for more than 182 days. One of the exemptions is for "a person who has gone out of India ... for carrying on outside India a business or vocation outside India". Lets say a person who is Indian citizen resides in India for more than 182 days, but he is outside India for carrying on a business. I assume that makes him a non-resident for FEMA purpose and as such Section 4 does not apply to him? Also, does this Indian citizen need to file any documentation with the Reserve Bank to establish that he is going out of India for carrying on a business if he will be receiving foreign exchange while he is abroad to carry on a business? Please note that the Indian citizen will not be taking any foreign exchange out of India when going abroad.

3. FEMA 1999 Section 4 provides exemptions to Indian residents when foreign currency or foreign security was "inherited from a person resident outside India". Does the word "inherited" include "gift from son"?

4. Does an Indian resident citizen have yearly tax liability on shares held in a foreign unit investment trust or foreign investment company or does the tax liability arise only at the time when the shares of the unit investment trust or investment company are disposed? The Indian resident citizen plans to hold the shares of the foreign unit investment trust or investment company for a period several years and the unit investment trust or investment company will be investing in shares of other public companies in Europe and USA thus accruing both short term and long term capital gains to the corporation.

Thank you!

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