RBI/2011-12/179
A.P. (DIR Series) Circular No. 17
September 16, 2011
To
All Banks Authorised to Deal in Foreign Exchange
Madam / Sir,
Gift in Rupees by Resident Individuals to NRI
close relatives
Attention of the Authorised Dealer (AD) banks is invited to
A.P. (DIR Series)
Circular No. 24 dated December 20, 2006 and
A.P. (DIR Series) Circular No. 9
dated September 26, 2007 in terms of which the remittances towards gift and
donation by a resident individual was included in the Liberalised Remittance
Scheme.
- The Committee to review the facilities for individuals under the
Foreign Exchange Management Act (FEMA), 1999 has in its Report recommended
that the ambit of
FEMA Notification No.16/RB-2000 dated May 3, 2000 may be
expanded to include permission to residents making gifts to and bearing
medical expenses of visiting NRIs/PIOs.
- The extant position has been reviewed and it has been decided to permit a
resident individual to make a rupee gift to a NRI/PIO who is a close
relative of the resident individual [close relative as defined in Section 6
of the Companies Act, 1956] by way of crossed cheque /electronic transfer.
The amount should be credited to the Non-Resident (Ordinary) Rupee Account
(NRO) a/c of the NRI / PIO and credit of such gift amount may be treated as
an eligible credit to NRO a/c. The gift amount would be within the overall
limit of USD 200,000 per financial year as permitted under the Liberalised
Remittance Scheme (LRS) for a resident individual. It would be the
responsibility of the resident donor to ensure that the gift amount being
remitted is under the LRS and all the remittances under the LRS during the
financial year including the gift amount have not exceeded the limit
prescribed under the LRS.
- The necessary amendments to the Foreign Exchange Management (Deposit)
Regulations, 2000 and Notification No. FEMA 16/RB-2000 dated May 3, 2000
viz. Receipt from and Payment to, a Person Resident Outside India are being
issued separately.
- AD banks may bring the contents of this circular to the notice of their
constituents and customers concerned.
- The directions contained in this circular have been issued under Sections
10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999)
and are without prejudice to permissions/approvals, if any, required under
any other law.
Yours faithfully,
(Meena Hemchandra)
Chief General Manager In-Charge