TaxTMI 
TaxTMI 
Master Circular on Miscellaneous Remittances from India - Facilities for Residents
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....al Manager-in-Charge Click here to download Master Circular ============= Document 1 INDEX A.1 GENERAL 3 A.2 SALE OF EXCHANGE .5 A.3 MEDICAL 6 A.4 CULTURAL TOURS 6 A.5 PRIVATE VISITS 7 A.6 BUSINESS VISITS 7 A.7 PERIOD OF SURRENDER OF FOREIGN EXCHANGE 7 A.8 UNSPENT FOREIGN EXCHANGE .. 8 A.9 REMITTANCES FOR TOUR ARRANGEMENTS, ETC. .9 A. 10 PAYMENT IN RUPEES 11 A.11 ADVANCE REMITTANCE -IMPORT OF SERVICES 11 A. 12 ISSUE OF GUARANTEE- IMPORT OF SERVICES. 12 A.13 LIBERALISED REMITTANCE SCHEME OF USD 200,000 12 A. 14 DOCUMENTATION. 15 A.15 ENDORSEMENT ON PASSPORT 16 A. 16 INTERNATIONAL CREDIT CARDS 16 A.17 INTERNATIONAL DEBIT CARDS 17 A.18 STORE VALUE CARDS/CHARGE CARDS/SMART CARDS, ETC ... 17 A. 19 ACQUISITION OF FOREIGN SECURITIES UNDER EMPLOYEES STOCK OPTION PLAN (ESOP) 18 A.20 INCOME- TAX CLEARANCE 18 ANNEX-1 19 ANNEX-2 .26 ANNEX-3 32 ANNEX-4 34 ANNEX-5 37 ANNEX-6 38 ANNEX-7 39 ANNEX-8 44 APPENDIX-I 45 APPENDIX-2 47 Release of Foreign Exchange by Authorised Dealers A.1 General 1.1 For release of foreign exchange to persons resident in India for various current account transactio....
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....ards training, sponsorship and prize money), (f) Film shooting, (g) Medical treatment abroad, (h) Disbursement of crew wages, (i) Overseas education, (j) Remittance under educational tie up arrangements with universities abroad, (k) Remittance towards fees for examinations held in India and abroad and additional score sheets for GRE, TOEFL, etc., (l) Employment and processing, assessment fees for overseas job applications, (m) Emigration and emigration consultancy fees, (n) Skills / credential assessment fees for intending migrants, (o) Visa fees, (p) Processing fees for registration of documents as required by the Portuguese / other Governments, registration / subscription /membership fees to International Organisations. 1.4 Release of foreign exchange is not admissible for travel to and transaction with residents of Nepal and Bhutan. (cf. Clause (b) of Rule 3 of the Rules (as indicated in item 2 of Appendix 2). 4 A.2 Sale of Exchange 2.1 Where approvals have been granted by the Reserve Bank / Government of India, foreign exchange may be sold within the period of validity stated in the approval and the details of the sale should be e....
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....to be submitted to the Authorised Dealers. 3.3 A person who has fallen sick after proceeding abroad may also be released foreign exchange by an Authorised Dealer for medical treatment outside India. A.4 Cultural Tours Dance troupes, artistes, etc., who wish to undertake tours abroad for cultural purposes should apply to the Ministry of Human Resources Development (Department of Education and Culture), Government of India, for their foreign 6 exchange requirements. Authorised Dealers may release foreign exchange, on the strength of the sanction from the Ministry concerned, to the extent and subject to conditions indicated therein. A.5 Private Visits Foreign exchange for private visit can also be released to a person who is availing of foreign exchange for travel outside India for any purpose up to the limits specified in Schedule III to the Rules. A.6 Business Visits Foreign exchange for undertaking 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 to the l....
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.... channels by resident individuals. 8.5 The eligible credits to the Resident Foreign Currency (Domestic) Account, out of foreign exchange acquired in the form of currency notes, bank notes and travellers cheques, are as under :- 8 (i) acquired by him from an Authorised Person for travel abroad and represents the unspent amount thereof or (ii) acquired by him, while on a visit to any place outside India, by way of payment for services not arising from any business in or anything done in India and by way of honorarium or gift or (iii) acquired by him, from any person not resident in India, and who is on a visit to India, as honorarium, gift, for services rendered or in settlement of any lawful obligation. Note: Where a person approaches an Authorised Person for surrender of unspent/ unutilized foreign exchange after the prescribed period, Authorised Person should not refuse to purchase the foreign exchange merely on the ground that the prescribed period has expired. A.9 Remittances for Tour Arrangements, etc. 9.1 Authorised Dealers may remit foreign exchange up to a reasonable limit, at the request of a traveller towards his hotel accommodation, tour arrangemen....
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.... received in India against such consolidated tour arrangement, may require to be remitted from India to these neighbouring countries for services rendered by travel agents and hoteliers in these countries. Authorised Dealers may allow such remittances after verifying that the amount being remitted to the neighbouring countries (inclusive of remittances, if any, already made against the tour) does not exceed the amount actually remitted to India and the country of residence of the beneficiary is not Pakistan. 10 A.10 Payment in Rupees Authorised Dealers may accept payment in cash up to Rs. 50,000 (Rupees fifty thousand only) against sale of foreign exchange for travel abroad (for private visit or for any other purpose). Wherever the sale of foreign exchange exceeds the amount equivalent to Rs.50,000, the payment must be received only by (i) a crossed cheque drawn on the applicant's bank account, or (ii) crossed cheque drawn on the bank account of the firm/company sponsoring the visit of the applicant, or (iii) Banker's Cheque / Pay Order / Demand Draft or (iv) Debit / credit / prepaid cards provided a) KYC/AML guidelines are complied with b) sale of foreign c....
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....d in respect of family members subject to individual family members complying with the terms and conditions of the Scheme. 13.4 Remittances under the Scheme are allowed only in respect of permissible current or capital account transactions or a combination of both. 12 All other transactions which are otherwise not permissible under FEMA and those in the nature of remittance for margins or margin calls to overseas exchanges / overseas counterparty are not allowed under the Scheme. 13.5 Resident individuals are free to acquire and hold immovable property or shares (of listed companies or otherwise) or debt instruments or any other asset outside India without prior approval of the Reserve Bank. 13.6 The limit of USD 200,000 under the Scheme also include remittances towards gift and donation by a resident individual. 13.7 Remittances under the Scheme can be used for purchasing objects of art subject to the provisions of other applicable laws such as the extant Foreign Trade Policy of the Government of India. 13.8 The Scheme can also be used for remittance of funds for acquisition of ESOPs. The Scheme is in addition to acquisition of ESOPs linked to ADR / GDR and ac....
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....1, on or before fifth of the following month to which it relates. A soft copy of the statement (in Excel format) may also be sent by email to [email protected]. This statement in the revised format should be forwarded through Online Returns Filing System (ORFS) for which purpose all 14 the AD Category - I Banks have been given user ID and password by the Reserve Bank. A.14 Documentation 14.1 The Reserve Bank will not, generally, prescribe the documents which should be verified by the Authorised Dealers while releasing foreign exchange. In this connection, attention of authorized dealers is drawn to sub- section (5) of Section 10 of the FEMA, 1999 (as indicated in item 3 of Appendix 2)) which provides that an authorised person shall require any person wanting to transact in foreign exchange to make such a declaration and to give such information as will reasonably satisfy him that the transaction will not involve and is not designed for the purpose of any contravention or evasion of the provisions of the FEMA or any rule, regulation, notification, direction or order issued there under. 14.2 Authorised Dealers are also required to keep on record any information / doc....
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....intaining foreign currency accounts with an Authorised Dealer in India or a bank abroad, as permissible under extant Foreign Exchange Regulations, are free to obtain ICCs issued by overseas banks and other reputed agencies. The charges incurred against the card either in India or abroad, can be met out of funds held in such foreign currency account/s of the card holder or through remittances, if any, from India only through a bank where the card holder has a current or savings 16 account. The remittance for this purpose should also be made directly to the card issuing agency abroad, and not to a third party. 16.6 The applicable limit will be the credit limit fixed by the card issuing banks. There is no monetary ceiling fixed by the Reserve Bank for remittances, if any, under this facility. A.17 International Debit Cards 17.1 Banks authorised to deal in foreign exchange are issuing International Debit Cards (IDCs) which can be used by a resident for drawing cash or making payment to a merchant establishment overseas during his visit abroad. It is clarified that IDCs can be used only for permissible current account transactions and the item-wise limits as mentioned in ....
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....Management (Current Account Transactions) Rules, 2000 Notification No. G.S.R.381(E) dated 3rd May 2000 (as amended from time to time)* : In exercise of the powers conferred by Section 5 and sub-section (1) and clause (a) of sub-section (2) of Section 46 of the Foreign Exchange Management Act, 1999, and in consultation with the Reserve Bank, the Central Government having considered it necessary in the public interest, makes the following rules, namely :-- 1. Short title and commencement .--- (1) These rules may be called the Foreign Exchange Management (Current Account Transactions) Rules, 2000; (2) They shall come into effect on the 1st day of June 2000. 2. Definitions .--- In these rules, unless the context otherwise requires : (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 appended to these rules; (d) The words a....
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....olly 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 up to 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. 21 Schedule II Transactions which require prior approval of the Central Government (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 USD 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 through ocean transport by a Govt. Depa....
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.... meeting expenses for medical treatment abroad exceeding the estimate from the doctor in India or hospital/doctor abroad. 23 10. Release of exchange for studies abroad exceeding the estimate from the institution abroad or USD 100,000, per academic year, whichever is higher. 11. Commission, per transaction, to agents abroad for sale of residential flats or commercial plots in India exceeding USD 25,000 or 5% of the inward remittance whichever is more. 12. Omitted 13. Omitted 14. Omitted 15. $ Remittance exceeding USD 1,000,000 per project, for any consultancy service procured from outside India. 16. Omitted 17. * Remittance exceeding USD 100,000 by an entity in India by way of reimbursement of pre-incorporation expenses. 18. Omitted 24 (Amendments) Notification GSR.663 (E) dated August 17, 2000, S.O.301(E) dated March 30, 2001, GSR.442(E) dated November 2, 2002, GSR.831(E) dated December 20, 2002, GSR.33(E) dated January 16, 2003, GSR.397(E) dated May 14, 2003, GSR.731(E) dated September 11, 2003, GSR.849(E) dated October 29, 2003, GSR.608(E) dated September 13, 2004, G.S.R.512(E) dated July 28,2005, G.S.R.412(E) dated July 11, 2006, and G.S.R.....
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.... Indian investment abroad in branches S0805 S0004 News agency services Indian investment abroad in subsidiaries and associates S0806 S0005 Other information services - Subscription to newspapers, periodicals Indian investment abroad in real estate S0006 Royalties and License Fees (09) Repatriation of Foreign Direct Investment in India- in equity shares S0901 S0007 Franchises services - patents, copyrights, trade marks, industrial processes, franchises etc. Repatriation of Foreign Direct Investment in India- in debt securities S0902 S0008 Payment for use, through licensing arrangements, of produced originals or prototypes (such as Repatriation of Foreign Direct Investment in India in real estate manuscripts and films) Other Business Services (10) S0009 Repatriation of Foreign Portfolio Investment in India in equity shares S1001 27 S0010 Repatriation of Foreign Portfolio Investment in India in debt securities Merchanting services -net payments (from Sale & purchase of goods without crossing the border). S1002 S0011 Loans extended to Non-Residents Trade related services - commission on exports / imports S0012....
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....nses of Indian Airlines companies operating abroad Government not included elsewhere (g.n.i.e.) (12) S0209 Freight on imports - Airlines companies S1201 S0210 Maintenance of Indian embassies abroad Freight on exports - Airlines companies SI 202 S0211 Remittances by foreign embassies in India Operational leasing (with crew) -Airlines companies Transfers (13) S0212 S1301 Booking of passages abroad - Airlines companies S0213 Remittance by non-residents towards family maintenance and savings Payments on account of stevedoring, demurrage, port handling charges etc. S1302 Travel (03) S0301 Remittance towards personal gifts and donations S1303 Remittance towards Business travel. Remittance towards donations to religious and charitable institutions abroad S0302 S1304 Travel under basic travel quota (BTQ) Remittance towards grants and donations to other governments and charitable institutions established by S0303 the governments. Travel for pilgrimage S1305 S0304 Contributions/donations by the Government to international institutions Travel for medical treatment S1306 S0305 Travel for education (including fees, hostel exp....
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.... c. Account No d. PAN No Details of the foreign exchange required 1. Amount (Specify currency). 2. Purpose Source of funds: Nature of instrument I = IV Draft. Direct remittance V Details of the remittance made under the scheme in the financial year (April - March) 200 Date VI Details of the Beneficiary Amount 1. Name 2. Address 3. Country * 4. Name and address of the bank * 5. Account No (* Required only when the remittance is to be directly credited to the bank account of the beneficiary) This is to authorize you to debit my account and effect the foreign exchange remittance/issue a draft as detailed above. (strike out whichever is not applicable). Declaration hereby declare that the total amount of I, foreign (Name) exchange purchased from or remitted through, all sources in India during the current financial year as per item No. V of the Application, is within the limit of USD 200,000/- (US Dollar two hundred thousand only), which is the 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....
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....ring the above remittance as well as the relevant documents and books of accounts required for ascertaining the nature of remittance and for determining the rate of deduction of tax at source as per provisions of section 195. We hereby certify the following : 1. Name and address the beneficiary of the remittance and the name of the foreign country to which remittance is being made. 2. Amount of remittance in foreign currency indicating the proposed date/month and bank through which remittance is being made. 3. Details of tax deducted at source, rate at which tax has been Foreign Currency Indian @ Currency deducted and date of deduction. Amount to be remitted Tax deducted at source Actual amount remitted Rate at which deducted Date of Deduction 4. In case the remittance as indicated in (2) above is net of taxes, whether tax payable has been grossed up? If SO, computation thereof may be indicated. 5. If the remittance is for royalties, fee for technical services, interest, dividend, etc., the clause of the relevant DTAA under which the remittance is covered along with reasons and the rate at which tax is required to be deducted in terms of such clause ....
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....oreign Exchange Management Act, 1999. Reserve Bank will not prescribe the documents which should be verified by the Authorised Dealers while permitting remittances for various transactions, particularly of current account. In terms of the provisions contained in sub-section 5 of section 10 of the Act, before undertaking any transaction in foreign exchange on behalf of any person, Authorised Dealer is required to obtain a declaration and such other information from the person (applicant) on whose behalf the transaction is being undertaken that will reasonably satisfy him that the transaction is not designed to contravene or evade the provisions of the Act or any of the Rules or Regulations made or Notifications or directions or orders issued under the Act. Authorised Dealers should preserve the information / documents obtained by them from the applicant before undertaking the transactions for verification by the Reserve Bank. In case the person on whose behalf the transaction is being undertaken refuses or does not give satisfactory compliance of the requirements of an authorised person, he shall refuse in writing to undertake the transactions. Where an authorized person ha....
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....000 each towards (i) employment abroad (ii) emigration (iii) maintenance of close relatives abroad (iv) education abroad and (v) medical treatment abroad without insisting on any supporting documents but on the basis of self declaration incorporating the basic details of the transaction and submission of Application in Form A2. Authorised Dealers should also ensure that payment for purchase of foreign exchange is made by the applicant by means of cheque or demand draft or by debit to his/her account. Authorised Dealer may also accept the payment through credit /debit/prepaid card of the card holder as stipulated in our A.P. (DIR Series) Circular No.40 dated December 10, 2008. In addition, the existing facility of release of exchange by Authorised Persons up to USD 10,000 or its equivalent in one financial year for one or more private visits to any country (except Nepal and Bhutan) will continue to be available on a self-declaration basis. 3. Small Value Remittances Authorized dealers may release foreign exchange not exceeding USD 5,000 or its equivalent, for all permissible current account transactions. Authorised Dealers may obtain simplified Application-cum-Declaration form....
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....cheme. The remittances made under this Scheme will be reported in the R-Return in the normal course. The Authorised Dealers may also prepare and keep on 42 record dummy Form A2, in respect of remittances exceeding USD 5000. In addition, Authorised Ds would also furnish information on the number of applicants and total amount remitted under the Scheme, on a monthly basis, to the Reserve Bank of India, Foreign Exchange Department (EPD), Central Office, Mumbai. 43 Annex 8 (Para A.13.9 of Master Circular) [A.P. (DIR Series) Circular No.36 dated April 4, 2008] Format Statement indicating the details of remittances made by resident individuals under the Liberalised Remittance Scheme for the month ended Name of the Bank: Sl.No. Purpose of remittance No. of applicants Amount remitted in USD 1. Deposit 2. Purchase of immovable property 3. Investment in equity/debt 4. Gift 5. Donation 6. Travel 7. Maintenance of close relatives 8. Medical Treatment 9. Studies abroad 10. Others (please specify, enclose a separate sheet, if necessary) Total Name and designation of the authorised official: Place: Signature Date: Stamp and seal 44....