Foreign Exchange Management (Permissible Capital Account
TRANSACTIONS) Regulations, 2000
FEMA
1/2000-RB, dated 3-5-2000 [GSR 384(E), dated 3-5-2000] - In exercise of the powers conferred by sub-section (2) of
section 6, sub-section (2) of section 47 of the Foreign Exchange Management
Act, 1999 (42 of 1999), the Reserve Bank of India makes, in consultation with
the Central Government following regulations relating to capital account
transactions namely :—
(i) These Regulations
may be called the “Foreign Exchange Management (Permissible Capital Account
Transactions) Regulations, 2000”.
(ii) They shall come into force on the 1st day
of June, 2000.
In these Regulations, unless the context requires
otherwise,—
(a) ‘Act’ means, the Foreign Exchange Management Act, 1999 (42
of 1999);
(b) “Drawal” means drawal of foreign
exchange from an authorised person and includes opening of Letter of Credit or
use of International Credit Card or International Debit Card or ATM card or any
other thing by whatever name called which has the effect of creating foreign
exchange liability;
(c) ‘Schedule’ means a schedule to these Regulations;
(d) ‘Transferable Development Rights’
means certificates issued in respect of category of land acquired for public
purpose either by Central or State Government in consideration of surrender of
land by the owner without monetary compensation, which are transferable in part
or whole;
(e) The words and expressions used but
not defined in these Regulations shall have the same meanings respectively
assigned to them in the Act.
Permissible Capital Account Transactions.
(1) Capital account transactions of a person
may be classified under the following heads, namely :—
(A) transactions,
specified in Schedule I, of a person resident in India;
(B) transactions,
specified in Schedule II, of a person resident outside India.
(2) Subject to the provisions of the Act or the rules or regulations or direction or orders made or issued thereunder, any person may sell or draw foreign exchange to or from an authorised person for a capital account transaction specified in the Schedules:
Provided that the transaction is
within the limit, if any, specified in the regulations relevant to the
transaction.
Save as
otherwise provided in the Act, rules or regulations made thereunder,
(a) no person shall undertake or sell or draw
foreign exchange to or from an authorised person for any capital account
transaction :
1 Provided that—
(a) subject to the provisions of the Act or
the rules or regulations or directions or orders made or issued thereunder, a
resident individual may draw from an authorized person foreign exchange not
exceeding US $ 25,000 per calendar year for a capital account transaction
specified in Schedule I;
(b) where the drawal of foreign
exchange by a resident individual for any capital account transaction specified
in Schedule I exceeds US $ 25,000 per calendar year, the limit specified in the
regulations relevant to the transaction shall apply with respect to the drawal
:
Provided
further
that no part of the foreign exchange of US $ 25,000 drawn under clause (a) of
the first proviso shall be used for remittance directly or indirectly to
countries notified as non-co-operative countries and territories by Financial
Action Task Force (FATF) from time to time and communicated by the Reserve Bank
of India to all concerned;]
(b) no person resident outside India shall
make investment in India, in any form, in any company or partnership firm or
proprietary concern or any entity, whether incorporated or not, which is
engaged or proposes to engage—
(i) in the business of chit fund, or
(ii) as Nidhi Company, or
(iii) in agricultural or plantation activities, or
(iv) in real estate business, or construction
of farm houses, or
(v) in trading in Transferable Development Rights (TDRs).
Explanation.—For the purpose of this
regulation, “real estate business” shall not include development of townships,
construction of residential/commercial permises, roads or bridges.
Method of payment for investment.
The payment for investment
shall be made by remittance from abroad through normal banking channels or by
debit to an account of the investor maintained with an authorised person in
India in accordance with the regulations made by the Reserve Bank under the
Act.
Every person
selling or drawing foreign exchange to or from an authorised person for a
capital account transaction shall furnish to the Reserve Bank, a declaration in
the form and within the time specified in the regulations relevant to the
transaction.
[See Regulation 3(1)(A)]
(a) Investment by a person resident in India
in foreign securities.
(b) Foreign currency loans raised in India and
abroad by a person resident in India.
(c) Transfer of immovable property outside India
by a person resident in India.
(d) Guarantees issued by a person resident in
India in favour of a person resident outside India.
(e) Export, import and holding of
currency/currency notes.
(f) Loans and overdrafts (borrowings) by a
person resident in India from a person resident outside India.
(g) Maintenance of foreign currency accounts in
India and outside India by a person resident in India.
(h) Taking out of insurance policy by a person
resident in India from an insurance company outside India.
(i) Loans and overdrafts by a person resident
in India to a person resident outside India.
(j) Remittance outside India of capital assets
of a person resident in India.
(k) Sale and purchase of foreign exchange
derivatives in India and abroad and commodity derivatives abroad by a person
resident in India.
[See Regulation 3(1)(B)]
Classes of capital account transactions of persons
resident outside India
(a) Investment in India by a person resident
outside India, that is to say,
(i) issue of security by a body corporate or an
entity in India and investment therein by a person resident outside India; and
(ii) investment by way of contribution by a
person resident outside India to the capital of a firm or a proprietorship concern
or an association of persons in India.
(b) Acquisition and transfer of immovable
property in India by a person resident outside India.
(c) Guarantee by a person resident outside India
in favour of, or on behalf of, a person resident in India.
(d) Import and export of currency/currency notes
into/from India by a person resident outside India.
(e) Deposits between a person resident in India
and a person resident outside India.
(f) Foreign currency accounts in India of a
person resident outside India.
(g) Remittance outside India of capital assets in
India of a person resident outside India.
[K1]Inserted by the Foreign Exchange Management (Permissible Capital Account Transactions) (Amendment) Regulations, 2004, w.e.f. 5-2-2004.