RBI/2004-05/4
Master Circular No. / 4 /2004-05 July
1, 2004 To, All
Authorised Dealers in Foreign Exchange Madam/Sir, Master
Circular- Remittance facilities for Non-Resident Indians/ Persons of Indian Origin/Foreign
NationalsRemittance
facilities for Non-Residents/Persons of Indian Origin/Foreign Nationals are being
governed by sub-section (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 as 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stand withdrawn on July 1, 2005 and be replaced by an updated Master Circular
on the subject. Yours faithfully, Grace
Koshie Chief General Manager
Annex
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. |
AP(DIR Series) Circular
No. | Dated |
| AP
(DIR Series) Circular No.45 | May
14, 2002 | |
AP (DIR
Series) Circular No.1 | July
2, 2002 | |
AP (DIR
Series) Circular No.5 | July
15, 2002 | |
AP (DIR
Series) Circular No.19 | September
12, 2002 | |
AP (DIR
Series) Circular No.26 | September
28, 2002 | |
AP (DIR
Series) Circular No.27 | September
28, 2002 | |
AP (DIR
Series) Circular No.35 | November
01, 2002 | |
AP (DIR
Series) Circular No.40 | November
5, 2002 | |
AP (DIR
Series) Circular No.46 | November
12, 2002 | |
AP (DIR
Series) Circular No.56 | November
26, 2002 | |
AP (DIR
Series) Circular No.59 | December
9, 2002 | |
AP (DIR
Series) Circular No.67 | January
13, 2003 | |
AP (DIR
Series) Circular No.101 | May
5, 2003 | |
AP (DIR
Series) Circular No.104 | May
31, 2003 | |
AP (DIR
Series) Circular No.43 | December
8, 2003 | |
AP (DIR
Series) Circular No.45 | December
8, 2003 | |
AP (DIR
Series) Circular No.62 | January
31, 2004 | Notifications
issued
|
Notification No. FEMA
62/2002-RB | May
13, 2002 | |
Notification No.FEMA
65/2002-RB | June
29,2002 | |
Notification No.FEMA
93/2003-RB | June
9, 2003 | |
Notification No.FEMA
97/2003-RB | July
8, 2003 |
INDEX Remittance
facilities for NRIs/PIO and Foreign Nationals.
Remittance
facilities for NRIs/PIO and Foreign Nationals The
guidelines for transfer of assets outside India by a person whether resident in
India or not are given in the Notifications No. FEMA 13/2000-RB and FEMA 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 under 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
USD one million, per calendar year, on production of documentary evidence in support
of acquisition/ inheritance 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. 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) or 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 bonafide purposes, to the satisfaction of the
authorized dealer, on production of 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. 2.2 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 were 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 authorized
dealer. 2.3 In respect
of remittance of sale proceeds of assets acquired by way of inheritance or legacy
for which there is no lock-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
purchased 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/PIO 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/PIO
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. Income-
tax clearance 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. [cf. Our
AP(DIR Series) Circular No.56 dated November 26,2002].
7. International
Credit Cards Authorized
dealers have been permitted to issue International Credit Cards to NRIs/PIO, without
prior approval of RBI. Such transactions may be settled by inward remittance or
out of balances held in the cardholder’s FCNR/NRE/Non-Resident (Ordinary) Rupee
accounts.
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