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TMI BlogForex Facilities for Residents (Individuals)X X X X Extracts X X X X X X X X Extracts X X X X ..... ndertaken by a resident that do not alter his assets or liabilities outside India are current account transactions. In terms of Section 5 of the FEMA, persons are free to buy or sell foreign exchange for any current account transaction except for those transactions on which Central Government has imposed restrictions, vide its Notification referred to above A copy of the Notification is available in the Official Gazette as well as an annexure to our Master Circular on Miscellaneous Remittances available at our website www.mastercirculars.rbi.org.in These details are available on the Reserve Bank's website as well as with the Authorised Dealers and Regional Offices of the Foreign Exchange Department of Reserve Bank. This FAQ attempts to answer all such questions in simple language.I. Guidelines on Travel Related Matters 1. Who is a resident? A 'person resident in India' is defined in Section 2(v) of FEMA, 1999 as: A person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include - (A) a person who has gone out of India or who stays outside India, in either case - for or on taking up employment outsid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction with persons resident in Nepal and Bhutan. 5. Can one obtain foreign exchange for medical treatment outside India? Authorised Dealers may release foreign exchange upto USD 100,000 or its equivalent to resident Indians for medical treatment abroad on self declaration basis of essential details, without insisting on any estimate from a hospital/doctor in India/abroad. A person visiting abroad for medical treatment can obtain foreign exchange exceeding the above limit, provided the request is supported by an estimate from a hospital/doctor in India/abroad. This exchange is to meet the expenses involved in treatment. In addition to the amount referred to in Answer to Question No.4 above may also be availed. 6. How much exchange is available for studies outside India? ADs may release an amount of USD 100,000 per academic year or the estimate received from the institution abroad, whichever is higher. Students going abroad for studies are treated as Non-Resident Indians (NRIs) and are eligible for all the facilities available to NRIs under FEMA. In addition, they can receive remittances up to USD 100,000 from close relatives (as defined in Section 6 of the Companies Act, 1956 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge for travel abroad? Travellers are allowed to purchase foreign currency notes/coins only up to USD 2000. Balance amount can be taken in the form of travellers cheque or banker's draft. Exceptions to this are (a) travellers proceeding to Iraq and Libya can draw foreign exchange in the form of foreign currency notes and coins not exceeding USD 5000 or its equivalent; (b) travellers proceeding to the Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States can draw entire foreign exchange released in the form of foreign currency notes or coins. 12. Do same Rules apply to persons going for studies abroad? For the purpose of studies abroad, exchange for maintenance expenses is released in the form of (i) currency notes up to USD 2,000, (ii) the balance foreign exchange may be taken in the form of travellers cheques or bank draft payable overseas. 13. How much in advance one can buy foreign exchange for travel abroad? The foreign exchange acquired for any purpose has to be used within 60 days of purchase. In case it is not possible to use the foreign exchange within the period of 60 days, it should be surrendered to an authorised deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign exchange can other residents send as gift / donation to a person resident outside India? Other residents like corporates, partnership firms, trusts etc., are free to remit up to USD 5000 per annum per donor/remitter each as gift and donation. Remittances exceeding the limit will require prior permission from the Reserve Bank. 20. Is one permitted to use International Credit Card (ICC) for undertaking foreign exchange transactions? Use of the International Credit Cards (ICCs) / ATMs/ Debit Cards can be made for making personal payments like subscription to foreign journals, internet subscription, etc., and for travel abroad in connection with various purposes. The entitlement of foreign exchange on International Credit Cards (ICCs) is limited by the credit limit fixed by the card issuing authority only. With ICCs one can (i) meet expenses/make purchases while abroad (ii) make payments in foreign exchange for purchase of books and other items through internet in India. If the person has a foreign currency account in India or with a bank overseas, he/she can even obtain ICCs of overseas banks and reputed agencies. Use of these instruments for payment in foreign exchange in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant Foreign Trade Policy. 26. How much jewellery one can carry while going abroad? Taking personal jewellery out of India is governed by Baggage Rules framed under Foreign Trade Policy by the Government of India. No approval of Reserve Bank is required in this case. 27. Can a resident extend local hospitality to a non-resident? A person resident in India is free to make any payment in Indian Rupees towards meeting expenses on account of boarding, lodging and services related thereto or travel to and from and within India of a person resident outside India who is on a visit to India. 28. Can residents purchase air tickets in India for their travel not touching India? Residents may book their tickets in India for their visit to any third country. That is, residents can book their tickets for travel, for instance from London to New York, through domestic/foreign airlines in India itself. 29. Can a resident open a foreign currency denominated account in India? Persons resident in India are permitted to maintain foreign currency accounts in India under the following three Schemes: a. Exchange Earners' Foreign Currency (EEFC) Accounts:- All categories of resident foreign excha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iduals. The account shall be maintained in the form of Current Account and shall not bear any interest. There is no ceiling on the balances in the account. 30. Can a person resident in India hold assets outside India? In terms of sub-section 4, of Section (6) of the Foreign Exchange Management Act, 1999, a person resident in India is free to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India. (Please also refer to the Liberalised Remittance Scheme of USD 50, 000 discussed below). II. Liberalised Remittance Scheme of USD 50,000. 31. What is the Liberalised Remittance Scheme of USD 50,000? This is a facility extended to all resident individuals under which, they may freely remit upto USD 50,000 per fianancial year for any permissible current or capital account transaction or a combination of both. 32. Who is eligible to avail of this Liberalised Remittance Facility? The facility is available to resident individuals only. 33. Is there any fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat are the requirements to be complied with by the remitter? The individual will have to designate a branch of an AD through which all the remittances under the Scheme will be made. The applicants should have maintained the bank account with the bank for a minimum period of one year prior to the remittance. He has to furnish an application-cum-declaration in the specified format regarding the purpose of the remittance and declare that the funds belong to him and will not be used for purposes prohibited or regulated under the Scheme. 40. If an investment of USD 50,000 rises in value within the year, can one book profits and invest abroad again? The investor is free to book profit or loss abroad and to invest abroad again. He is under no obligation to repatriate the funds remitted abroad. 41. Can an individual, who has repatriated the amount remitted during the financial year, avail of the facility once again? Once a remittance is made for an amount upto USD 50,000 during the financial year, he would not be eligible to make any further remittances under this route, even if the proceeds of the investments have been brought back into the country. 42. Can remittances be made only ..... X X X X Extracts X X X X X X X X Extracts X X X X
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