RBI/2015-2016/80
Master Circular No. 8/2015-16
July 01, 2015
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 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.
- 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.
- This Master Circular is being updated from time to time as and when fresh
instructions are issued. The date up to which the Master Circular has been
updated is suitably indicated.
- This Master Circular may be referred to for general guidance. The Authorised Dealer Category – I banks and Authorized banks may refer to
respective circulars / notifications for detailed information, if so needed.
Yours faithfully,
(A K Pandey)
Chief General Manager
- 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 the Foreign Exchange Management Act, 1999 (FEMA) or Rules
or Regulations made there under.
- Definition of NRI/ PIO
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).
- 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, subject to payment of applicable taxes as prescribed by
Central Board of Direct Taxes.
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.
- 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 referred to in section 6(5)
of the Act 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
payment of applicable taxes in India, if any.
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, 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 bona fide 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 bona fide 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,
upon 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.
- 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 bona
fide purposes, subject to payment of applicable taxes in India, if any.
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 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. 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) 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.
- Remittance of Salary
6.1 A citizen of a foreign State, resident in India, being an employee of a
foreign company or a citizen of India, employed by a foreign company outside
India and in either case on deputation to the office/ branch/ subsidiary/ joint
venture/ group company 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/ group company 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.
6.2 A citizen of a foreign state resident in India being in employment with a
company incorporated in India may open, hold and maintain a foreign currency
account with a bank outside India and remit the whole salary received in India
in Indian Rupees, to such account, for the services rendered to the Indian
company, provided that income-tax chargeable under the Income-tax Act, 1961 is
paid on the entire salary accrued in India.
[The term ‘company’ will include a ‘Limited Liability Partnership’ as defined
under the LLP Act, 2008]
- 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.
- 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 up
to (i) limits prescribed under the Liberalized Remittance Scheme which would
include remittances from close relatives in India towards maintenance and
remittances towards their studies. However, for the purpose of studies, the
limits would be as demanded by the university abroad; and (ii) 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.
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.
- Income-tax clearance
The remittances will be allowed to be made by the Authorized Dealer banks on
production of an undertaking by the remitter in the formats prescribed by the
Central Board of Direct Taxes, Ministry of Finance, Government of India from
time to time. Reserve Bank of India will not issue any instructions under FEMA,
1999 clarifying tax issues. It shall be mandatory on the part of Authorised
Dealers to comply with the requirement of tax laws, as applicable.
- 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
Particulars of statement |
Periodicity |
Relevant instructions |
Facilities to NRIs/PIO and Foreign Nationals –
Liberalisation - Remittance from NRO account. |
Monthly |
A.P (DIR Series) Circular
No. 106 February 18, 2014 |
APPENDIX
List of notifications/circulars which have been consolidated in this Master
Circular
https://rbi.org.in/Scripts/BS_ApCircularsDisplay.aspx
https://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 |
23. |
A.P (DIR Series) Circular No. 106 |
February 18, 2014 |
24. |
A.P (DIR Series) Circular No. 151 |
June 30, 2014 |
25. |
A.P (DIR series) Circular No 43 |
December 2, 2014 |
26. |
A.P (DIR Series) Circular No 62 |
January 22, 2015 |
27 |
A.P (DIR Series) Circular No 106 |
June 1, 2015 |
|