RBI/2009-10/ 288
A.P. (DIR Series) Circular No.26
January 14, 2010
To
All Authorised Dealer Category - I banks
Madam / Sir,
Remittance of Salary - Relaxation
Attention of Authorised Dealer Category – I banks is invited to A. P. (DIR
Series) Circular No. 17 dated September 20, 2003 and sub-regulation 8 of
Regulation 7 of Notification No. FEMA 10/2000-RB dated May 3, 2000 viz. Foreign
Exchange Management (Foreign Currency Account by a person resident in India)
Regulation, 2000, in terms of which a national 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 in India of such foreign company, may open,
hold and maintain a foreign currency account with a bank outside India and
receive the salary payable to him by credit to such account subject to the
conditions mentioned therein, which inter alia, include that the amount to be
credited to such account shall not exceed 75 per cent of the salary accrued to
or received by such person from the foreign company.
- The Government of India, has since liberalised the above facility by
notifying in the Gazette of India published in part II, Section 3, Sub-section (i)
dated November 23, 2009 vide G.S.R. 838 (E) [Notification No. FEMA 199/2009-RB
dated September 30, 2009], as indicated below:
(i) 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 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.
(ii) 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.
- A copy of the Notification is annexed.
- Authorised Dealer Category – I 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 Section
10(4) and Section 11(1) of the FEMA 1999 (42 of 1999) and is without prejudice
to permissions/approvals, if any, required under any other law.
Yours faithfully,
(D. Mishra)
Chief General Manager
RESERVE BANK OF
INDIA
FOREIGN EXCHANGE DEPARTMENT
CENTRAL OFFICE
MUMBAI- 400 001
Notification No.FEMA. 199 /2009-RB
Dated: September 30, 2009
Foreign Exchange Management (Foreign Currency
Accounts by a Person Resident in India) (Second Amendment) Regulations, 2009
In exercise of the powers conferred by clause (b) of Section 9 and clause (e)
of sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999
(42 of 1999), the Reserve Bank of India makes the following amendment in the
Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in
India) Regulations, 2000, (Notification No. FEMA 10/2000-RB dated 3rd May,
2000), namely:-
1. Short title and commencement:-
(i) These Regulations may be called the Foreign Exchange Management (Foreign
Currency Accounts by a Person Resident in India) (Second Amendment) Regulations,
2009.
(ii) These Regulations shall come into force from the date of their publication
in the Official Gazette.
2. Amendment to the Regulations:-
In the Foreign Exchange Management (Foreign Currency Accounts by a Person
Resident in India) Regulations, 2000, (Notification No. FEMA. 10/2000-RB dated
3rd May, 2000), in Regulation 7, for sub-regulation (8) the following shall be
substituted, namely:
“(8) (i) 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 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.
(ii) 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 such an Indian
company, provided that income-tax chargeable under the Income-tax Act, 1961 is
paid on the entire salary accrued in India.”
(Salim Gangadharan)
Chief General Manager-in-Charge
Foot Note:
The Principal Regulations were published in the Gazette of India vide G.S.R. No.
393(E) dated May 5, 2000 in Part II, Section 3, Sub-section (i) and subsequently
amended vide
(a) G.S.R. No. 675(E) dated August 25, 2000,
(b) G.S.R. No. 89(E) dated February 12, 2001,
(c) G.S.R. No. 103(E) dated February 19, 2001,
(d) G.S.R. No. 200(E) dated March 21, 2001,
(e) G.S.R. No. 5(E) dated January 2, 2002,
(f) G.S.R. No. 261(E) dated April 9, 2002,
(g) G.S.R. No. 465(E) dated July 2, 2002,
(h) G.S.R. No. 474(E) dated July 8, 2002,
(i) G.S.R. No. 755(E) dated November 8, 2002,
(j) G.S.R. No. 756(E) dated November 8, 2002,
(k) G.S.R. No. 224(E) dated March 18, 2003,
(l) G.S.R. No. 398(E) dated May 14, 2003,
(m) G.S.R. No. 452(E) dated June 3, 2003,
(n) G.S.R.No. 453(E) dated June 4,2003,
(o) G.S.R.No.11(E) dated January 7,2004,
(p) G.S.R.No.13(E) dated January 7,2004,
(q) G.S.R.No.209(E) dated March 23,2004,
(r) G.S.R. No. 455(E) dated June 30, 2007,
(s) G.S.R. No. 778(E) dated December 19, 2007,
(t) G.S.R. No. 92(E) dated February 15, 2008,