FREQUENTLY ASKED QUESTIONS

1. a person who has gone out of India or who stays outside India, in either case
   for or on taking up employment outside India, or for carrying on outside India a business or vocation outside India, or for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;
2. a person who has come to or stays in India, in either case, otherwise than –
   for or on taking up employment in India, or
   for carrying on in India a business or vocation in India, or
   for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;
   any person or body corporate registered or incorporated in India,
   an office, branch or agency in India owned or controlled by a person resident outside India, an office, branch or agency outside India owned or controlled by a person resident in India;
   
   That is to qualify as a resident the person concerned will have to fulfill the criterion regarding
   (A) the duration of stay and
   (B) the purpose of stay.
   The term Person Resident Outside India is defined in the Act as a person who is not a person resident in India.

• Foreign exchange can be purchased from any bank branch dealing in foreign exchange or full-fledged moneychangers provided they are also permitted to release exchange for business & private visits.
• Generally, Travelers are allowed to purchase foreign currency notes/coins only up to USD 3000. Balance amount can be taken in the form of travelers cheque or banker’s draft. Exceptions to this are
  (a) travelers 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) travelers 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.
• If the rupee equivalent exceeds Rs.50,000/- the entire payment has to be made by way of crossed cheque/banker’s cheque/pay order/demand draft only.
• Foreign exchange can be bought 60 days ahead of the journey date. In case it is not possible to use the foreign exchange within a period of 60 days, it should be surrendered to the Bank.
  

• Foreign exchange up to USD 2,000 in the form of foreign currency notes or travelers cheques can be retained indefinitely for future use.
  
• Amounts in excess of USD 2,000 have to be surrendered to a bank within 180 days of return
• Facility to credit the amounts to Rupee Foreign Currency (Domestic) account is also available. Foreign coins can be retained indefinitely without any limit.

• Residents are permitted to take outside India (other than Nepal & Bhutan) currency notes of Government of India and Reserve Bank of India notes up to an amount of Rs.7500/- per person. A person can take or send out of India to Nepal & Bhutan, currency notes other than notes of denomination of above Rs.100.

• A person coming into India from abroad can bring in with him Indian currency notes within the limits given below:
  a. up to Rs. 7500/- from any country other than Nepal or Bhutan, and
  b. any amount in denomination not exceeding Rs.100 from Nepal or Bhutan

Carrying foreign exchange while coming to India

A person coming into India from abroad can bring with him foreign exchange without any limit. However, if the aggregate value of the foreign exchange in the form of currency notes, bank notes or travelers cheques brought in exceeds USD 10,000/- or its equivalent and/or the value of foreign currency exceeds USD 5,000/- or its equivalent, it should be declared to the Customs Authorities at the Airport in the Currency Declaration Form (CDF), on arrival in India.

FREQUENTLY ASKED QUESTIONS

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:

1. Exchange Earners’ Foreign Currency (EEFC) Accounts:-
   
   All categories of resident foreign exchange earners can credit up to 100 per cent of their foreign exchange earnings, as specified in the paragraph 1 (A) of the Schedule to Notification No.FEMA.10/2000-RB dated 3rd May, 2000 and as amended from time to time, to their EEFC Account with an authorised dealer in India. Funds held in EEFC account can be utilised for all permissible current account transactions and also for approved capital account transactions as specified by the extant Rules/Regulations/ Notifications/ Directives issued by the Government/RBI from time to time. Balance In EEFC account become nil in the next month of the deposit month.
   
   
2. Resident Foreign Currency (RFC) Accounts :-
   
   Returning Indians, i.e., those Indians, who were non-residents earlier, and are returning now forpermanent stay, are permitted to open, hold and maintain with an authorized dealer in India a Resident Foreign Currency (RFC) Account to keep their foreign currency assets. Assets held outside India at the time of return can be credited to such accounts.
   The foreign exchange
   (i) received or acquired as gift or inheritance from a person referred to sub-section (4) of section 6
   of FEMA,1999 or
   (ii) referred to in clause I of section 9 of the Act or acquired as gift or inheritance there from may also be credited to this account or
   (iii) received as the proceeds of life insurance policy claims/maturity/ surrender values settled in foreign currency from an insurance company in India permitted to undertake life insurance business by the Insurance Regulatory and Development Authority. The funds in RFC account are free from all restrictions regarding utilization of foreign currency balances including any restriction on investment outside India.
   
   
3. RFC (Domestic) Account:-
   
   A person resident in India can open, hold and maintain with an authorized dealer in India, a Resident Foreign Currency (Domestic) Account, out of foreign exchange acquired in the form of currency notes, Bank notes and travelers cheques from any of the sources like, payment for services rendered abroad, as honorarium, gift, services rendered or in settlement of any lawful obligation from any person not resident in India. The account may also be credited with/opened out of foreign exchange earned like proceeds of export of goods and/or services, royalty, honorarium, etc., and/or gifts received from close relatives (as defined in the Companies Act) and repatriated to India through normal banking channels by resident individuals. 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

Is there any category of visit which requires prior approval from the Reserve Bank or Govt. of India?

Dance troupes, artistes, etc., who wish to undertake cultural tours abroad, are required to obtainprior approval from the Ministry of Human Resources Development, Government of India, NewDelhi

Is one required to follow complete export procedure when a gift parcel is sent outside India?

A person resident in India is free to send (export) any gift article of value not exceeding Rs. 5,00,000 provided export of that item is not prohibited under the extant Foreign Trade Policy.

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

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.

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.
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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

1. Remittance out of lottery winnings.
2. Remittance of income from racing/riding etc. or any other hobby.
3. Remittance for purchase of lottery tickets, banned/proscribed magazines, football pools, sweepstakes, etc.
4. Payment of commission on exports made towards equity investment in Joint Ventures/ Wholly Owned Subsidiaries abroad of Indian companies.
5. Remittance of dividend by any company to which the requirement of dividend balancing is applicable.
6. Payment of commission on exports under Rupee State Credit Route, except commission upto 10% of invoice value of exports of tea and tobacco.
7. Payment related to 'Call Back Services' of telephones.
8. Remittance of interest income on funds held in Non-Resident Special Rupee (Account) Scheme.