FEMA, Current Account Transactions, Rules 2000.

Short title and commencement
Definitions
Prohibition on drawal of foreign exchange
Prior approval of Government of India
Prior approval of Reserve Bank
SCHEDULE I
SCHEDULE II
SCHEDULE III

Foreign Exchange Management
(Current Account Transactions) Rules, 2000

G.S.R. No. 381(E). -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 (42 of 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) (Amendment) Rules, 2004.
   2. They shall come into force from the date of their publication in the Official Gazette.
      
      (Above (1) & (2) has been amended vide Notification No. GSR 608(E)-RB, DT. 13/09/2004)
      
      
   Pre-Revised "
   
   
   1. These rules may be called the Foreign Exchange Management (Current Account Transaction) (Fourth Amendment) Rules, 2003.
      
   2. They shall come into force from the date of their publication in the Official Gazette.]
      
      
   (Above (1) & (2) has been amended vide Notification No . FEMA GSR 849(E)-RB, DT. 27/10/2003)
   
   Pre-Revised "
   
   
   1. These Rules may be called the Foreign Exchange Management (Current Account Transactions) (Third Amendment) Rules, 2003.
   2. They shall come into force from the date of their publication in the Official Gazette.
      
      
   (Above sub-rules (1) & (2) has been amended vide Notification No. G.S.R. 731(E) Dt. 05/09/2003)
   
   
   1. These rules may be called the Foreign Exchange Management (Current Account Transaction) (Second Amendment) Rules, 2003.
   2. They shall come into force from the date of their publication in the Official Gazette.
      
      
   (Above sub-rules (1) & (2) has been amended vide Notification No. G.S.R. 397(E) Dt. 01/05/2003)
   
   1. 1. These rules may be called the Foreign Exchange Management (Current Account Transaction) (Amendment) Rules, 2003.
      2. They shall come into force from the date of their publication in the Official Gazette.
         
         
      (Above sub-rules (1) & (2) has been amended vide FEMA Notification No. G.S.R. 33(E) dated the 15th January, 2003)
      
      
      1. 1. These rules may be called the Foreign Exchange Management (Current Account Transactions) (Second Amendment) Rules, 2000.
         2. They shall come into force on the date of their publication in the Official Gazette.
            
            (Above sub-rules (1) & (2) has been amended vide Notification No. G.S.R.831(E) Dt. 17/12/2002)
            1. These Rules may be called the Foreign Exchange Management (Current Account Transactions) (Amendment) Rules, 2001.
            2. They shall come into force with immediate effect.
               
      (Above sub-rules (i) & (ii) has been amended vide Notification No. S.O. 301(E), dated 30/03/2001)
      
      
      1. 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."
            
   Definitions.
2. In these rules, unless the context otherwise requires :
   1. "Act" means the Foreign Exchange Management Act, 1999 (42 of 1999) ;
   2. "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 of A TM Card or any other thing by whatever name called which has the effect of creating foreign exchange liability;
   3. "Schedule" means a schedule appended to these rules;
      d. The words and expressions not defined in these rules but defined in the Act shall have the same meanings respectively assigned to them in the Act.
      
   Prohibition on drawal of foreign exchange.
   
   
3. Drawal of foreign exchange by any person for the following purpose is prohibited, namely :-
   1. a transaction specified in the Schedule I; or -
   2. a travel to Nepal and/ or Bhutan; or
   3. a transaction with a person resident in Nepal of Bhutan :
      Provided that the prohibition in clause (c) may be exempted by Reserve Bank of India subject to such term and conditions as it may consider necessary to stipulate by special or general order.
      
      
   Prior approval of Government of India.
   
4. No person shall draw foreign exchange for a transaction included in the Schedule n without prior approval of the Government of India :
   Provided that this rule shall not apply where the payment is made out of funds held in Resident Foreign Currency (RFC) Account of the remitter.
   
   (In above rule (4), following bold words has been deleted vide Notification No. S.O. 301(E), dated 30/03/2001)
   Pre-Revised" No person shall draw foreign exchange for a transaction included in the Schedule n without prior approval of the Government of India :
   Provided that this rule shall not apply where the payment is made out of funds held in Resident Foreign Currency (RFC) Account or Exchange Earner's Foreign currency (EEFC) Account of the remitter."
   
   Prior approval of Reserve Bank.
   
5. No person shall draw foreign exchange for a transaction included in the Schedule ill without prior approval of the Reserve Bank ;
   Provided that this rule shall not apply where the payment is made out of funds held in Resident Foreign Currency (RFC) Account of the remitter.
   
   (In above rule (5), following bold words has been deleted vide Notification No. S.O. 301(E), dated 30/03/2001)
   Pre-Revised " No person shall draw foreign exchange for a transaction included in the Schedule ill without prior approval of the Reserve Bank ;
   Provided that this rule shall not apply where the payment is made out of funds held in Resident Foreign Currency (RFC) Account or Exchange Earner's Foreign Currency (EEFC) Account of the remitter."
   
   
6. 1. Nothing contained in rule 4 or rule 5 shall apply to drawal made out of funds held in Exchange Earners’ Foreign Currency (EEFC) account of the remitter.
      
   2. Notwithstanding anything contained in sub-rule (1), restrictions imposed under rule 4 or rule 5 shall continue to apply where the drawal of foreign exchange from the Exchange Earners Foreign Currency (EEFC) account is for the purpose specified in items 10 and 11 of Schedule II, or item 3, 4, 11, 16 & 17 Schedule III as the case may be.
      (Above rule (6) has been inserted vide Notification No. S.O. 301(E), dated 30/03/2001)
      
7. Use of International Credit Card while outside India. – Nothing contained in rule 5 shall apply to the use of International Credit Card for making payment by a person towards meeting expenses while such person is on a visit outside India.
   
   (Above rule 7. has been added vide FEMA Notification No. G.S.R. 33(E) dated the 15th January, 2003)

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/ prescribed magazines, football pools, sweepstakes, etc.
4. Payments 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 of exports under Rupee State Credit Route, except commission up to 10% of invoice value of exports of tea and tobacco.

(Above item 6. has been substituted vide Notification. No. G.S.R. 397(E) Dt. 01/05/2003)
Pre-Revised "

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 Scheme Account.

SCHEDULE II
(See rule 4)

SCHEDULE III
(See rule 5)

[OMITTED-

1. Remittance by artiste e.g. wrestler, dancer entertainer, etc. (This restriction is not applicable to artistes engaged by tourism related organisations in India like I1DC, 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 $ 10000 or its equivalent in one calendar year, for one or more private visits to any country (except Nepal and Bhutan).
   
   (In above Item No. 2 bold words & figures has been substituted vide Notification No. G.S.R.831(E) Dt. 17/12/2002)
   
   (As a measure of further liberalization, the above limit has been enhanced to US$ 10,000 or its equivalent. Applications, for release of foreign exchange exceeding the above limit, may be submitted to the concerned Regional Office of the Reserve Bank, through the Authorised Persons.
   
   Pl. refer A.P.(DIR Series) Cir. No. 51/2002-03-RB, Dt. 18/11/2002)
   
   (Please refer A.P.(DIR Series) Cir No.31/2002-03-RB,Dt.18/10/2002)
   
3. Gift remittance exceeding US$ 5,000 per remitter/donor per annum.
   
   "Pre-Revised : Gift remittance exceeding US$ 5,000 per beneficiary per annum."
   
4. Donation exceeding US$ 5,000 per remitter/donor per annum.
   
   "Pre-Revised : Donation exceeding US$ 5,000 per annum per beneficiary."
   
   (Above item nos. (3) & (4) has been substituted vide Notification No. S.O. 301(E), dated 30/03/2001)
   
5. Exchange facilities exceeding US$ 100,000 for persons going abroad for employment.
   
6. Exchange facilities for emigration exceeding US$ 100,000 or amount prescribed by country or emigration.
   
   (In item Number 5 & 6 bold word and figures has been substituted vide Notification No. G.S.R.731(E), Dt. 05/09/2003)
   
7. Remittance for maintenance of close relatives abroad,
   1. 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 –
      1. is a citizen of a foreign State other Pakistan; or
      2. is a citizen of India, who is on deputation to the office or branch or subsidiary or joint venture in India of such foreign company.
         Above Clause (i) has been substituted vide Notification No. G.S.R. 397(E) Dt. 01/05/2003)
         
         
      Pre-Revised "
      
      1. 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.]
      2. Exceeding US$ 5,000 per year per recipient, in all other cases.
         
         Explanation: For the purpose of this item, a person resident in India on account of his employment or deputation of [OLD - employment of ] 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".
         
         (In above explanation bold words before OLD has been substituted vide Notification No G.S.R. 397(E) Dt. 01/05/2003)
         
         "Pre-Revised : Remittance for maintenance of close rela1ives abroad exceeding US$ 5,000 per year. per recipient.]
         
         (Pl. refer Notification No. G.S.R.731(E), Dt. 05/09/2003)
         
         (Above item no. (7) has been substituted vide Notification No. S.O. 301(E), dated 30/03/2001)
         
8. Release of foreign exchange, exceeding US$ 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.
   
   (Pl. refer AP (DIR Series) Cir. No. 17/2002-03-RB, Dt. 12/09/2002 for Liberalisation of Release of Foreign Exchange for Medical Treatment Abroad related to above item No. 9.)
   
   
10. Release of exchange for studies abroad exceeding the estimates from the institution abroad or US$ 100,000 per academic year, whichever is higher.
    
    (In item Number 10 bold word and figures "US$ 100,000" has been substituted vide Ntf. No. G.S.R.731(E), Dt. 05/09/2003)
    
    Pre-Revised : Release of exchange for studies abroad exceeding the estimates from the institution abroad or US$ 30,000, whichever is higher.]
    
    (In above item no. (10) bold words has been inserted vide Notification No. S.O. 301(E), dated 30/03/2001)
    
    
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.
    
    Pre-Revised "
    11. Commission to agents abroad for sale of residential flats/commercial plots in India, exceeding 5 per cent of the inward remittance. ]
    
    [OMITTED-
    
12. Short-term credit to overseas offices of Indian companies.
    
    [OMITTED-
    
13. Remittances for advertisement on foreign television by a person whose export earnings are less than Rs. 10 lakh during each of the preceding two years.
    
    (Pl. refer A.P.(DIR Series) Cir. No. 54/2002-03-RB, Dt. 25/11/2002 - Clarifiction relating to remittance for certain Current Account transactions under miscellaneous purposes for above Item 13)
    
    [OMITTED-
14. Remittances 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$ 1,000,000, per project, for any consultancy service procured from outside India.
    
    (In item Number 15 bold word and figures has been substituted vide Notification No. G.S.R.731(E), Dt. 05/09/2003)
    
    Pre-Revised : " 15. Remittances exceeding US$ 100,000 for architectural/consultancy services procured from abroad.]
    
    (Above item no. (15) has been substituted vide Notification No. S.O. 301(E), dated 30/03/2001)
    
    
16. Remittance for purchase of trademark or franchise in India
    
    Pre-Revised :
    16. Remittances for use and/or purchase of trade mark/franchise in India.]
    
    
17. Remittance exceeding US$100,000, by an entity in India by way of reimbursement of pre-incorporation expenses.
    
    (Above item no. (17) has been inserted vide Notification No. S.O. 301(E), dated 30/03/2001)
    
    (Item No. 1, 12, 13 14, 18 has been omitted & item No. 11. and 16. has been substituted vide Notification No. GSR 608(E)-RB, DT. 13/09/2004)
    
    (Please refer CIR. NO. 86/2003-04-RB, DT. 17/14/2004 for Requests of Indian Nationals on deputation to India from Overseas Companies )
    
    (Please refer CIR. NO. 76/2003-04-RB, DT. 24/02/2004 - Foreign Exchange Management Act (FEMA), 1999 – Current Account Transactions)
    
    (Please refer CIR. NO. 71/2003-04-RB, DT. 20/02/2004 - Export of Goods to Russia against Repayment of State Credits in Rupees – Payment of Agency Commission)
    
    (Pl. refer CIR. NO. 64/2003-04-RB, DT. 04/02/2004 - Liberalised Remittance Scheme of USD 25,000 for Resident Individuals)
    
    (Please refer Cir. NO. 33/2003-04-RB, Dt. 13/11/2003)
    
    (Please refer A.P.(DIR Series) Cir. No. 05/2003-04-RB, Dt. 21/07/2003)
    
    (Pl. refer Cir. No. 72/2002-03-RB, Dt. 17/01/2003 for Major changes proposed in the revised Life Insurance Memorandum (LIM))
    
    (Note: see AP (Dir Series) Cir. No. 2-RB, dt. 27/7/2001)