Whether a person being resident in India can accept and possess foreign currency?
Many persons are interested at preserving old currency, new released currency, foreign currency received by them. Few of them possess the foreign currency for some specified purpose. Many times they counter questions regarding eligibility for possession of foreign currency and the permitted limit to which they can possess the foreign currency.
This is an attempt to address those queries at the best possible way with the help of Notification no. FEMA.11/2000-RB dated 3rd May, 2000.
Possession of foreign currency by an authorised person
Reserve Bank, may on application made to it, authorize any person to be known as authorised person to deal in foreign exchange or in foreign securities, as an authorised dealer, money changer or off-shore banking or any others.Authorised Dealers/ Authorised Money Changers/ franchisees may freely purchase foreign currency notes, coins and travellers cheques from residents as well as non-residents. Authorised person may possess foreign currency and coins without any limit.
Possession of foreign currency by a resident other than authorised person
I. Foreign Coins:
Any person can possess foreign coins without any limit. That is, person can hold foreign coins for uncertain period for uncertain purpose.
II. Foreign Currency:
Possession of foreign currency by resident is again divided into two categories depending upon whether resident individual is either permanently resident or not.
A. Resident in India
Any person resident in India may possess foreign currency notes and foreign currency travellers’ cheques not exceeding USD 2000 or its equivalent in aggregate if it-
a. Receipt for services rendered
If the foreign exchange due or accrued as remuneration for services rendered, whether in or outside India, or in settlement of any lawful obligation, or an income on assets held outside India, or as inheritance, settlement or gift by a resident individual,then he must surrender the foreign currency so received to Authorised Dealer within seven days from the date of its receipt.
In case, foreign exchange purchased for a specific purpose is not utilized for that purpose, it could be utilized for any other eligible purpose for which drawal of foreign exchange is permitted. However, resident individual has to surrender received / realised / unspent / unused foreign exchange to an Authorised Person within a period of 180 days from the date of return to the India.
Person resident in India but not permanently resident
A person resident in India but not permanently resident may possess foreign currency without any limit, if such foreign currency was acquired, held or owned by him when he was resident outside India and has brought the same into India. Here, ‘not permanently resident’ means a person resident in India for employment of a specified duration (irrespective of length) or for a specific job or assignment, the duration of which does not exceed three years.
|AUTHOR CONTACT DETAILS|
|Venkata Krishna Rao B |
|CA Murali Krishna G|
– Contributed by Mr. Venkata Krishna Rao B & vetted by CA Murali Krishna G