LIBERALISED
REMITTANCE SCHEME OF US D 25,000 FOR RESIDENT INDIVIDUALS
A.P. (DIR Series) (2003-04) Circular No. 64, dated 4-2-2004
Liberalised Remittance Scheme of US D 25,000 for Resident Individuals
As you are aware, we have been closely monitoring the
macro-economic developments of the country and initiating suitable policy
changes in tune with the changing scenario. As a step towards further
simplification and liberalization of the foreign exchange facilities available
to residents, it has been decided that resident individuals may freely remit
upto US D 25,000 per calendar year for any purpose for which a Scheme has
been formulated as detailed below:
Eligibility
All resident individuals are eligible to avail of the
facility under the scheme. The facility will not be available to corporates,
partnership firms, HUF, Trusts, etc.
Purpose
3.1 This facility is available for making remittance up
to USD 25,000 per calendar year for any current or capital account transactions
or a combination of both.
3.2 Under this facility, resident individuals will be
free to acquire and hold immovable property or shares or any other asset
outside India without prior approval of the Reserve Bank. Individuals will also
be able to open, maintain and hold foreign currency accounts with a bank
outside India for making remittances under the scheme without prior approval of
Reserve Bank. The foreign currency account may be used for putting through all
transactions connected with or arising from remittances eligible under this scheme.
3.3 It is further clarified that
the facility under the scheme is in addition to those already available for
private travel, business travel, gift remittances, donations, studies, medical
treatment etc. as described in Schedule III of Foreign Exchange Management
(Current Account Transactions) Rules, 2000. (Annexure B).
3.4 The remittance facility under the scheme is not
available for the following :
(i) Remittance for any purpose specifically prohibited under
Schedule I (like purchase of lottery/sweep stakes, tickets proscribed
magazines etc.) or any item restricted under Schedule II of Foreign Exchange
Management (Current Account Transactions) Rules, 2000. (Annexure B).
(ii) Remittances
made directly or indirectly to Bhutan, Nepal, Mauritius or Pakistan.
(iii) Remittances made directly or indirectly to countries
identified by the Financial Action Task Force (FATF) as non co-operative
countries and territories viz. Cook Islands, Egypt, Guatemala,
Indonesia, Myanmar, Nauru, Nigeria, Philippines and Ukraine.
(iv) Remittances directly or indirectly to those individuals and
entities identified as posing significant risk of committing acts of terrorism
as advised separately by the Reserve Bank to the banks.
Remittance Procedure
Requirements to be complied with by the remitter.
4.1 To avail of this facility,
the individual will have to designate a branch of an AD through which all the
remittances under the scheme will be made.
4.2 The resident individual seeking to make the
remittance should furnish an application letter cum declaration in the
format as indicated in Annexure-A regarding the purpose of the remittance and
declaration that the funds belong to the remitter and will not be used for the
purposes as detailed above.
Requirements to be complied with by the
Authorised Dealers
4.3 While allowing the facility to resident individuals,
Authorised Dealers are required to ensure that the Know Your Customer
Guidelines have been implemented in respect of these accounts. They should also
comply with the Anti-Money Laundering Rules in force while allowing the
facility.
4.4 The applicants should have maintained the bank
account with the bank for a minimum period of one year prior to the remittance.
If the applicant seeking to make the remittance is a new customer of the bank,
Authorised Dealers should carry out due diligence on the opening, operation and
maintenance of the account. Further the AD should obtain bank statement for the
previous year from the applicant to satisfy themselves regarding the source of
funds. If such a bank statement is not available, copies of the latest
Income-tax Assessment Order or Return filed by the applicant may be obtained.
4.5 The AD should ensure that the payment is received out
of funds belonging to the person seeking to make the remittance, by a cheque
drawn on the applicants bank account or by debit to his account or by Demand
Draft/Pay Order.
4.6 Authorised dealer should certify that the remittance
is not being made directly or indirectly by/or to ineligible entities and that
the remittances are made in accordance with the instructions contained herein.
Reporting of the transactions
5. The remittances made under this Scheme will be
reported in the R-Return in the normal course. The ADs may also prepare and
keep on record dummy Form A2, in respect of remittances exceeding US D 5000.
Authorised Dealers may arrange to furnish on a quarterly basis, information on
the number of applicants and total amount remitted to the Chief General
Manager, External Payment Division, Foreign Exchange Department, Reserve Bank
of India, Central Office, Mumbai-400001.
6. Necessary amendments to the relevant Foreign Exchange
Management Regulations, 2000 as also the relevant Notifications, issued under
FEMA, 1999 are being issued separately.
7. Authorised Dealers may bring the contents of this
circular to the notice of their constituents concerned.
8. The directions contained in this circular have been
issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act,
1999 (42 of 1999).
Annexure A
Form in which the applicant should submit to the designated branch of an
Authorised Dealer in support of the request for remittance under the Scheme
Application cum Declaration
(To be completed by the applicant)
Application for purchase of foreign
exchange
I Details
of the applicant
(a) Name
..
(b) Address
(c) Account No
..
(d) PAN No
.
II
Details of the foreign exchange required
1. Amount (Specify currency)
2. Purpose
..
III Source
of funds:
.
IV Nature
of instrument
Draft
.
Direct remittance
V Details
of the remittance made under the scheme in the calendar year
Date Amount
VI Details
of the Beneficiary
1. Name
.
2. Address
.
*3. Name and address of the bank
.
*4. Account No
.
(*Required only when the remittance is to be directly
credited to the bank account of the beneficiary)
This is to authorise you to debit my account and
effect the foreign exchange remittance/issue a draft as detailed above. (strike
out whichever is not applicable).
Declaration
I,
.
, hereby declare that the total amount
of foreign exchange
(Name)
purchased from or remitted through, all sources in
India during last one year, including this application is within US D 25,000
(US Dollar Twenty five thousands only)the annual limit prescribed by the
Reserve Bank for the purpose and certify that the source of funds for making
the said remittance belongs to me and will not be used for prohibited purposes.
Signature of the applicant
(Name)
Certificate by the authorised dealer
This is to certify that the remittance is not being
made by/to ineligible entities and that the remittance is in conformity with
the instructions contained in Reserve Bank A.P. (DIR Series) Circular No.64
dated February 4, 2004.
Name and designation of the authorised official:
Place : Signature
Date: Stamp
and seal of the AD branch.
Annexure B
Foreign Exchange Management (Current Account Transactions)
Rules, 2000
Schedule I
(See Rule 3)
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.
7. Payment related to Call Back Services
of telephones.
8. Remittance of interest income on funds
held in Non-Resident Special Rupee (Account) Scheme.
Schedule II
(See Rule 4)
|
Purpose of Remittance |
Ministry/Department of Govt. of India whose approval is required |
|
1. Cultural Tours |
Ministry of Human Resources Development, (Department of Education and
Culture) |
|
2. Advertisement
in foreign print media for
the purposes other than promotion of
tourism, foreign investments and international bidding (exceeding US D
10,000) by a State Government and its Public Sector Undertakings |
Ministry of Finance, (Department of Economic
Affairs) |
|
3. Remittance
of freight of vessel chartered by a PSU |
Ministry of Surface Transport, (Chartering Wing) |
|
4. Payment of import by a Govt. Department or a PSU
on c.i.f. basis (i.e. other than f.o.b. and f.a.s. basis) |
Ministry of Surface Transport, (Chartering Wing) |
|
5. Multi-modal transport operators making
remittance to their agents abroad |
Registration Certificate from the (Director General
of Shipping) |
|
6. Remittance
of container detention
charges exceeding the rate prescribed by Director General of Shipping |
Ministry of Surface Transport (Director General of
Shipping) |
|
7. Remittances under technical collaboration
agreements where payment of royalty exceeds 5 per cent on local sales and 8
per cent on exports and lump sum payment exceeds US D 2 million |
Ministry of Industry and Commerce |
|
8. Remittance of prize money/ sponsorship of sports
activity abroad by a person other than International/National/State
Level sports bodies, if the amount involved exceeds US D 100,000 |
Ministry of Human Resources Development (Department
of Youth Affairs and Sports) |
|
9. Payment
for securing Insurance for
health from a company abroad |
Ministry of Finance, (Insurance Division) |
|
10. Remittance for membership of P& I Club |
Ministry of Finance, (Insurance Division) |
Schedule III
(See Rule 5)
1. the
purpose of this item, a person resident in India on account of his employment
of Remittance by artiste e.g.
wrestler, dancer, entertainer etc. (This restriction is not applicable to
artistes engaged by tourism related organizations in India like ITDC, State
Tourism Development Corporations etc. during special festivals or those
artistes engaged by hotels in five star categories, provided the expenditure is
met out of EEFC account).
2. Release
of exchange exceeding US D 10,000 or its equivalent in one calendar year, for
one or more private visits to any country (except Nepal and Bhutan).
3. Gift
remittance exceeding US D 5,000 per remitter/donor per annum.
4. Donation
exceeding US D 5,000 per remitter/donor per annum.
5. Exchange
facilities exceeding US D 100,000 for persons going abroad for employment.
6. Exchange
facilities for emigration exceeding US D 100,000 or amount prescribed by
country of emigration.
7. Remittance
for maintenance of close relatives abroad,
(i) exceeding net salary (after deduction of taxes, contribution
to provident fund and other deductions) of a person who is resident but not
permanently resident in India and is a citizen of a foreign state other than
Pakistan.
(ii) exceeding US D 100,000 per year, per recipient, in all other
cases.
Explanation: For a specified duration
(irrespective of length thereof) or for a specific job or assignment; the
duration of which does not exceed three years, is a resident but not
permanently resident.
8. Release of foreign exchange, exceeding
US D 25,000 to a person, irrespective of period of stay, for business travel,
or attending a conference or specialised training or for maintenance expenses
of a patient going abroad for medical treatment or check-up abroad, or for
accompanying as attendant to a patient going abroad for medical treatment/check-up.
9. Release of exchange for meeting
expenses for medical treatment abroad exceeding the estimate from the doctor in
India or hospital/doctor abroad.
10. Release of exchange for studies abroad
exceeding the estimate from the institution abroad or US D 100,000, per
academic year, whichever is higher.
11. Commission to agents abroad for sale of
residential flats/commercial plots in India, exceeding 5 per cent of the inward
remittance.
12. Short-term credit to overseas offices of
Indian companies.
13. Remittance for advertisement on foreign
television by a person whose export earnings are less than Rs.10 lakhs during
each of the preceding two years.
14. Remittance of royalty and payment of lump
sum fee under the technical collaboration agreement which has not been
registered with Reserve Bank.
15. Remittance exceeding US D 1,000,000 per
project, for any consultancy service procured from outside India.
16. Remittances
for use and/or purchase of trade mark/franchise in India.
17. Remittance
exceeding US D 100,000 by an entity in India by way of reimbursement of
pre-incorporation expenses.
18. Remittance
of hiring charges of transponder.