RBI/2013-2014/8
Master Circular No.8 /2013-14
July 01, 2013
To,
All Authorised Dealer Category – I banks and Authorised banks
Madam / Sir,
Master Circular on Remittance Facilities for Non-Resident Indians /
Persons of Indian Origin / Foreign Nationals
Remittance 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 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
consolidated in this Master Circular is furnished in the Appendix.
3. This Master Circular is being issued with a sunset clause of one year. This
circular will stand withdrawn on July 1, 2014 and be replaced with an updated
Master Circular on the subject.
Yours faithfully,
(Rudra Narayan Kar)
Chief General Manager-in-Charge
INDEX
1. Remittance facilities for Non Resident Indians (NRIs) / Persons of Indian
Origin (PIO) and Foreign Nationals
The Regulations for transfer of assets outside India by a person, whether
resident in India or not, are given in the Notification No. FEMA 13/2000-RB
dated May 3, 2000, as amended from time to time. Accordingly, remittance of
funds from the sale of capital assets in India held by a person, whether
resident in or outside India, requires approval of the Reserve Bank except to
the extent provided in FEMA or Rules or Regulations made thereunder.
2. Definition of NRI/PIO
NRI for this purpose is defined as a person resident outside India who is
citizen of India. In terms of Regulation 2 of FEMA Notification No.13 dated May
3, 2000, Non-Resident Indian (NRI) means a person resident outside India who is
a citizen of India. Person of Indian Origin (PIO) means a citizen of any country
other than Bangladesh or Pakistan who had (a) at any time held Indian passport
or (b) he or either of his parents or any of his grandparents was a citizen of
India by virtue of the Constitution of India or the Citizenship Act, 1955 or (c)
the person is a spouse of an Indian citizen or a person referred to in (a) or
(b).
3. Remittance of current income
3.1 Remittance outside India of current income like rent, dividend, pension,
interest, etc. in India of the account holder is a permissible debit to the NRO
account. Authorised Dealer banks may also allow repatriation of current income
like rent, dividend, pension, interest, etc. of NRIs who do not maintain an NRO
account in India based on an 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.
3.2 NRIs/ PIO have the option to credit the current income to their Non-Resident
(External) Rupee account, provided the Authorized Dealer bank is satisfied that
the credit represents current income of the non-resident account holder and
income tax thereon has been deducted / provided for.
3.3 Foreign nationals who come to India on employment and become residents in
terms of section 2 (v) of FEMA, 1999, and are eligible to open/ hold a resident
savings bank account, are permitted to re-designate their resident account
maintained in India as NRO account on leaving the country after their employment
to enable them to receive their legitimate dues subject to certain conditions.
4. Remittance of assets by a foreign national of non-Indian origin
4.1 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 who was resident in India, may remit an amount not
exceeding USD one million, per financial year (April-March), subject to the
satisfaction of the Authorised Dealer bank, on production of documentary
evidence in support of acquisition/ inheritance of assets and information 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.
A.P.(DIR Series) Circular No. 56 dated November 26, 2002].
4.2 These remittance facilities are not available to citizens of Nepal and
Bhutan.
4.3 when a person resident in India leaves India for a country (other than Nepal
or Bhutan) for employment/business/vocation outside India or with an intention
to stay outside India, his/her existing account is re-designated as NRO account.
In order to facilitate foreign nationals to collect their pending dues in India,
AD Category-I banks may permit such foreign nationals to re-designate their
resident account maintained in India as NRO account on leaving the country after
their employment to enable them to receive their pending bonafide dues, subject
to the following conditions:
- AD Category-I bank should obtain the full details from the account holder about
his legitimate dues expected to be received into his account.
- AD Category-I bank has to satisfy itself as regards the credit of amounts which
have to be bonafide dues of the account holder when she / he was a resident in
India.
- The funds credited to the NRO account should be repatriated abroad immediately,
subject to the AD Category-I bank satisfying itself regarding the payment of the
applicable Income tax and other taxes in India.
- The amount repatriated abroad should not exceed USD one million per financial
year.
- The debit to the account should be only for the purpose of repatriation to the
account holder’s account maintained abroad.
- There should not be any other inflow / credit to this account other than that
mentioned at point (a) above.
- AD Category-I bank should put in place proper internal control mechanism to
monitor the credits and debits to this account.
- The account should be closed immediately after all the dues have been received
and repatriated as per the declaration made by the account holder mentioned at
paragraph (a) above.
5. Remittance of assets by NRI/PIO
5.1 A Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) may remit an
amount up to USD one million, per financial 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 or settlement), for all
bonafide purposes, subject to the satisfaction of the Authorized Dealer bank and
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.
A.P.(DIR Series) Circular No. 56 dated November 26, 2002].
5.2 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 paragraph 5.1
above without any lock-in-period.
5.3 In respect of remittance of sale proceeds of assets acquired by way of
inheritance or legacy or settlement for which there is no lock-in period, NRI /
PIO may submit to the Authorised Dealer documentary evidence in support of
inheritance or legacy of assets, an undertaking by the remitter and certificate
by a Chartered Accountant in the prescribed formats. Settlement is also a mode
of inheritance from the parent, the only difference being that the property
under the settlement passes to the beneficiary on the death of the owner/parent
without any legal procedures/hassles and helps in avoiding delay and
inconvenience in applying for probate, etc. In case settlement is done without
retaining any life interest in the property i.e. during the lifetime of the
owner/parent, it would be tantamount to regular transfer by way of gift.
Therefore, if the property is received by NRI/PIO by way of settlement without
the settler retaining life interest, it may be reckoned as transfer by way of
gift and the remittance of sale proceeds of such property would be guided by the
extant instructions on remittance of balance in the NRO account.
5.4 (a) The remittance facility in respect of sale proceeds of immovable
property is not available to citizens of Pakistan, Bangladesh, Sri Lanka, China,
Afghanistan, Iran, Nepal and Bhutan.
A person or his successor who has acquired immovable property in accordance with
Section 6(5) of FEMA, 1999 cannot repatriate sale proceeds of such property
outside India except with prior permission of the Reserve Bank.
(b) The facility of remittance of sale proceeds of other financial assets is not
available to citizens of Pakistan, Bangladesh, Nepal and Bhutan.
6. Remittance of Salary
6.1 A citizen of a foreign state resident in India, being an employee of a
foreign company and on deputation to the office/ branch/ subsidiary/ joint
venture in India of such foreign company or being an employee of a company
incorporated in India, may open, hold and maintain a foreign currency account
with a bank outside India and receive/ remit the whole salary payable to him for
the services rendered, by credit to such account, provided that income tax
chargeable under the Income Tax Act, 1961 is paid on the entire salary as
accrued in India.
6.2 A citizen of India, employed by a foreign company outside India and on
deputation to the office/ branch/ subsidiary/ joint venture in India of such
foreign company, may open, hold and maintain a foreign currency account with a
bank outside India and receive the whole salary payable to him for the services
rendered to the office/ branch/ subsidiary/ joint venture in India of such
foreign company, by credit to such account, provided that income tax chargeable
under the Income Tax Act, 1961 is paid on the entire salary as accrued in India.
[The above provisions on remittance of Salary should be read with Schedule III
(7) of FEM (Current Account Transactions) Rules, 2000]
7. Repatriation of sale proceeds of residential property purchased by NRIs / PIO
out of foreign exchange *
7.1 Repatriation of sale proceeds of residential property purchased by NRI / PIO
is permitted to the extent of the amount paid for acquisition of immovable
property in foreign exchange received through banking channels. The facility is
restricted to not more than two such properties. The balance amount can be
credited to the NRO account and can be remitted under USD one million facility
as mentioned in paragraph 5.1.
7.2 Authorised Dealer banks 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 (B) account of the
account holder, or remittance from outside India through normal banking channels
and the Authorized Dealer bank is satisfied about the genuineness of the
transaction. Such funds may also be credited to the NRE / FCNR (B) account of
the NRI / PIO, if they so desire.
7.3 Authorised Dealer banks 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 dealer banks / 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(B)
accounts.
*Definition of PIO for this purpose will be as stated in Notification No. FEMA
21/2000-RB dated 03.05.2000.
8. Facilities for students
8.1 Students going abroad for studies are treated as Non- Resident Indians
(NRIs) and are eligible for all the facilities available to NRIs under FEMA.
8.2 As non-residents, they will be eligible to receive remittances from India (i)
up to USD 100,000 from close relatives in India, on self declaration, towards
maintenance, which could include remittances towards their studies also (ii) up
to USD 1 million per financial year, out of sale proceeds of assets / balances
in their NRO account maintained with an Authorised Dealer bank in India and
(iii) upto USD 200,000 per financial year under the Liberalized Remittance
Scheme.
8.3 All other facilities available to NRIs under FEMA are equally applicable to
the students.
8.4 Educational and other loans availed of by them as residents in India will
continue to be available as per FEMA regulations.
9. Income-tax clearance
The remittances will be allowed to be made by the Authorized Dealer banks 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.
A.P.(DIR Series) Circular No. 56 dated November 26, 2002].
10. International Credit Cards
Authorised Dealer banks have been permitted to issue International Credit Cards
to NRIs/ PIO, without prior approval of the Reserve Bank. Such transactions may
be settled by inward remittance or out of balances held in the cardholder’s
FCNR(B) / NRE/ NRO accounts.
Annex-1
Statement / returns to be submitted to the Reserve Bank
APPENDIX
List of notifications/circulars which have been consolidated in this Master
Circular
http://www.rbi.org.in/Scripts/BS_ApCircularsDisplay.aspx
http://www.rbi.org.in/Scripts/Bs_FemaNotifications.aspx
Sl. No. |
Notification/Circular No. |
Date |
1. |
Notification No. FEMA 62/2002-RB |
May 13, 2002 |
2. |
Notification No. FEMA 65/2002-RB |
June 29,2002 |
3. |
Notification No. FEMA 93/2003-RB |
June 9, 2003 |
4. |
Notification No. FEMA 97/2003-RB |
July 8, 2003 |
5. |
Notification No. FEMA 119/2004-RB |
June 29,2004 |
6. |
Notification No. FEMA 152/2007-RB |
May 15, 2007 |
1. |
A.P. (DIR Series) Circular No.45 |
May 14, 2002 |
2. |
A.P. (DIR Series) Circular No.1 |
July 2, 2002 |
3. |
A.P. (DIR Series) Circular No.5 |
July 15, 2002 |
4. |
A.P. (DIR Series) Circular No.19 |
September 12, 2002 |
5. |
A.P. (DIR Series) Circular No.26 |
September 28, 2002 |
6. |
A.P. (DIR Series) Circular No.27 |
September 28, 2002 |
7. |
A.P. (DIR Series) Circular No.35 |
November 01, 2002 |
8. |
A.P.(DIR Series) Circular No.40 |
November 5, 2002 |
9. |
A.P. (DIR Series) Circular No.46 |
November 12, 2002 |
10. |
A.P. (DIR Series) Circular No.56 |
November 26, 2002 |
11. |
A.P. (DIR Series) Circular No.59 |
December 9, 2002 |
12. |
A.P. (DIR Series) Circular No.67 |
January 13, 2003 |
13. |
A.P. (DIR Series) Circular No.101 |
May 5, 2003 |
14. |
A.P. (DIR Series) Circular No.104 |
May 31, 2003 |
15. |
A.P. (DIR Series) Circular No.43 |
December 8, 2003 |
16. |
A.P. (DIR Series) Circular No.45 |
December 8, 2003 |
17. |
A.P. (DIR Series) Circular No.62 |
January 31, 2004 |
18. |
A.P. (DIR Series) Circular No.43 |
May 13,2005 |
19. |
A.P. (DIR Series) Circular No.12 |
November 16, 2006 |
20 |
A.P. (DIR Series) Circular No.26 |
January 14, 2010 |
21. |
A.P. (DIR Series) Circular No 70 |
June 09, 2011 |
22. |
A.P (DIR Series) Circular No 82 |
February 11,2013 |