MASTER CIRCULAR NO. 4/2004‑05, DATED 1‑7‑2004, ISSUED BY FOREIGN EXCHANGE DEPARTMENT, RBI
Remittance
facilities for Non‑Residents/Persons of Indian Origin / Foreign Nationals
arc being governed by subsections (1) and (2) of section 6 of the Foreign
Exchange Management Act, 1999 read with FEMA Notification No. 13/2000‑RB
and FEMA Notification No. 21/2000‑RB both dated May 3,2000 amended from
time to time.
2. This Master Circular
consolidates the existing instructions on the subject of "Remittance
facilities for Non Resident Indians/Persons of Indian Origin/Foreign
Nationals" at one place. The list of underlying circulars/ notifications
is set out at Annex.
3. As recommended by the
Committee on Procedures and Performance Audit on Public Services (CPPAPS)
(Chairman: Shri S. S. Tarapore) set up by the Reserve Bank, this Master
Circular is being issued with a sunset clause of one year. This circular will
stand withdrawn on July 1, 2003 and be replaced by ail Updated Master Circular
on the subject,
LIST OF CIRCULARS WHICH HAVE BEEN CONSOLIDATED IN THIS MASTER CIRCULAR ON REMITTANCE FACILITIES FOR NON‑RESIDENT INDIANS/PERSONS OF INDIAN ORIGIN/FOREIGN NATIONALS
|
Sr. No. |
AO (DIR Series) Circular No. |
Dated |
|
|
AP (DIR Series) Circular No. 45 AP (DIR Series) Circular No. 1 AP (DIR Series) Circular No. 5 AP (DIR Series) Circular No. 19 AP (DIR Series) Circular No. 26 AP (DIR Series) Circular No. 27 AP (DIR Series) Circular No. 35 AP (DIR Series) Circular No. 40 AP (DIR Series) Circular No. 46 AP (DIR Series) Circular No. 56 AP (DIR Series) Circular No. 59 AP (DIR Series) Circular No. 67 AP (DIR Series) Circular No. 101 AP (DIR Series) Circular No. 104 AP (DIR Series) Circular No. 43 AP (DIR Series) Circular No. 45 AP (DIR Series) Circular No. 62 |
May 14,2002 July 2, 2002 July 5,2002 September 12, 2002 Sept ember 28, 2002 September 28, 2002 November 01, 2002 November 5, 2002 November 12, 2002 November 26,2002 December 9, 2002 January, 13, 2003 May 5, 2003 May 31, 2003 December 8, 2003 December 8, 2003 January 31, 2004 |
Notifications
issued
|
|
Notification No. FEMA 62/2002‑RB Notification No. FEMA 65/2002‑RB Notification No. FEMA 93/2003‑RB
Notification No. FEMA 97/2003‑RB |
May 13, 2002 June 29, 2002 June 9, 2003 July 8,2003 |
The
guidelines for transfer of assets outside India by a pet son whether resident
in India or not are given in the Notification Nos. FEMA 13/2000‑RB and
FFMA 21/2000‑RB both dated May 3, 2000 and the amendments issued thereto
from time to time.
According
to the above Notifications, remittance of
capital assets in India held by a person whether resident in or outside
India would require approval of the Reserve Bank except to the extent provided
in the Act or Rules or Regulations made Linder the Act.
1.
Remittance of assets by a foreign national of non‑Indian origin
1. 1 A foreign
national of non‑Indian origin who has retired from an employment in India
or who has inherited assets from a person resident in India or who is a widow
of an Indian citizen resident in India may remit an amount not exceeding LSD
one million, per calendar year, on production of documentary evidence in
support of acquisition/inheritance of asserts, an undertaking by the remitter
and certificate by a Chartered Accountant in the formats prescribed by the
Central Boat d of Direct Taxes vide their
Circular No. 10/2002 dated October 9,2002.
1.2 These
remittance facilities are not available to a citizen of Nepal and Bhutan,
1.3 The
remittance facility in respect of sale proceeds of immovable property is not
available to a citizen of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan,
Iran, Nepal and Bhutan.
2. Remittance of assets by NRI/PIO
2.1 A Non‑Resident
Indian (NRI) at a Person of Indian Origin (PIO) may remit an amount upto USD
one million, per calendar year, out of the balances held in his Non‑Resident
(Ordinary) Rupee (NRO) account/sale proceeds of assets (inclusive of assets
acquired by way of inheritance), for all bona fide purposes, to the
satisfaction of the authorized dealer, on production of an undertaking by the remitter and certificate b8 a
Chartered Accountant in the formats prescribed by the Central Board of Direct
Taxes vide their Circular No. 10/2002 dated October 9,2002.
2.2 NRI/PIO
may remit sale proceeds of immovable property purchased by him out of Rupee
funds or as a person resident in India as indicated in para 2.1 above, provided
such a property was held by him for a period not less than ten years. If such a
property is sold after being held for less than ten years, remittance can be
made, if the sale proceeds wet e held for the balance period in NRO account
(Savings/Term Deposit) or in any other eligible investment, provided such
investment is traced to the sale proceeds of the immovable property to the
satisfaction of the authorised dealer.
2.3 In
respect of remittance of sale proceeds of assets acquired by way of inheritance
or legacy for which there is no luck‑in period, NRI/PIO may submit
documentary evidence in support of inheritance or legacy of assets, an
undertaking by the remitter and certificate by a Chartered Accountant in the
formats prescribed by the Central Board of Direct Taxes vide their Circular No.
10/2002 dated October 9, 2002.
2.4 The
remittance facility in respect of sale proceeds of immovable property is not
available to a citizen of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan,
Iran, Nepal and Bhutan.
3. Repatriation of sale proceeds of
residential property purchased by NRIs/PIO out of foreign exchange
3.1 There is no lock‑in period
for sale of residential property purchased by NRI/PIO out of foreign exchange.
However, repatriation of sale proceeds of residential property put chased by
NRI/PIO out of foreign exchange is restricted to not more than two such
properties.
3.2
Authorized dealers may permit repatriation of amounts representing the refund
of application/earnest money/purchase consideration made by the house building
agencies/seller on account of non‑allotment of flat/plot/cancellation of
bookings/deals for purchase of residential/ commercial property, together with
interest, if any (net of income tax payable thereon), provided the original
payment was made out of NRE/FCNR account of the account holder, or remittance
from outside India through normal banking channels and the authorized dealer is
satisfied about the genuineness of the transaction. Such funds may also be credited to the NRE/'FCNR account of the
NRIs/PIO, if they so desire.
3.3
Authorized dealers may allow repatriation of sale proceeds of residential
accommodation purchased by NRIs/PlO out of funds raised by them by way of loans
from the authorized dealers/housing finance institutions to the extent of such
loan/s repaid by them out of foreign inward remittances received through normal
banking channel or by debit to their NRE/FCNR accounts.
4. Remittance of current Income
4.1
Remittance of current income like rent, dividend, pension, interest etc. of
NRIs/PIO who do not maintain NRO Account is freely allowed, on the basis of
appropriate certification by a Chartered Accountant certifying that the amount
proposed to be remitted is eligible for remittance
and that applicable taxes have been paid/ provided for.
4.2 NRIs/PlO
have the option to credit the current income to their Non‑Resident
(External) Rupee account, provided the authorized dealer is satisfied that the
credit represents current income of the non‑resident account holder and
income‑tax thereon has been deducted/provided for.
5. Facilities for students
5.1 Students
going abroad for studies are treated as Non‑Resident Indians (NRIs) and
are eligible for all the facilities available to NRIs under FEMA.
5.2 As Non‑Residents,
they will be eligible to receive remittances from India (i) upto USD 100,000
from close relatives in India on self declaration towards maintenance, which
could include remittances towards their studies also and (ii) upto USD 1
million out of sale proceeds of assets/balances in their account maintained
with an AD in India. Restriction in respect of remittance of sale proceeds of
immovable property as indicated in para 2.2 above shall apply.
5.3 All other
facilities available to NRIs under FEMA are equally applicable to the students.
5.4
Educational and other loans availed of by them as residents in India will
continue to be available as per FEMA regulations.
6. The
remittances will be allowed to be made by the authorized dealers on production
of an undertaking by the remitter and a Certificate from a Chartered Accountant
in the formats prescribed by the Central Board of Direct Taxes, Ministry of
Finance, Government of India in their Circular No. 10/2002 dated October 9,2002.
[ef. Our AP (DIR Series) Circular No. 56 dated November 26, 2002).
7.
Authorized dealers have been permitted to issue International Credit Cards to
NRIs/PIO, without prior approval of RBL Such transactions may be settled by
inward remittance or out of balances held in the cardholder's FCNR/NRE/Non‑Resident
(Ordinary) Rupee accounts.