Follow Us:

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

Possession of foreign currency

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-

  • was acquired by him while on a visit to any place outside India by way of payment for services not arising from any business in or anything done in India, or
  • was acquired by him, from any person not resident in India and who is on a visit to India, as honorarium or gift or for services rendered or in settlement of any lawful obligation, or
  • was acquired by him by way of honorarium or gift while on a visit to any place outside India, or
  • remains as unspent amount of foreign exchange acquired by him from an authorised person for travel abroad.

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.

b. Others

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.

Note: –

  1. The above mentioned limits do not apply to Foreign Exchange in the form of foreign currency of Nepal or Bhutan.
  2. Foreign Currency means any currency other than Indian Currency 
Venkata Krishna Rao BVenkata Krishna Rao B


+91 9030530184

CA Murali Krishna G
gmk@sbsandco.com +91 9849992493

– Contributed by Mr. Venkata Krishna Rao B & vetted by CA Murali Krishna G



Author Bio

My Published Posts

Impact of GST on Cab arrangements in a Hotel/Restaurant Impact of service tax on Cab arrangements in a Hotel/ Restaurant View More Published Posts

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.


  1. Jojo says:

    Dear Krish, as a beginner in Numismatics Society, Kerala I wish to know if there is any illegality in keeping foreign currency for hobby purpose ?RSVP to my email id. please. Thank you >>>>Jojo

  2. AMITABH says:

    We are a travel agent in India and we received foreign currency from a foreign client against tourism related services provided. Kindly inform me, according to the RBI’s Fema rule FOR HOW MANY DAYS WE CAN RETAIN THE FOREIGN CURRENCY WITH US FOR DEPOSITING INTO THE BANK.
    Please reply in my mail id given below. Many thanks in advance for guiding me……..

  3. Shagun Borgaonkar says:

    Thanks Authors… The article is indeed best esp regarding Possession and Retention Foreign Currency ..
    One more query that I wish you to resolve is, a new Regulation came on 29th Dec 2015 viz. Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2015 which (as it is notifies) supersedes Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2000. Reading them both, I’m doubtful as regards, what changes they have made in new regulations.
    Link for the New Regulations : rbi.org.in/scripts/NotificationUser.aspx?Id=10262&Mode=0
    Link for Old Regulations : rbi.org.in/Scripts/BS_FemaNotifications.aspx?Id=165

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Post by Date
July 2024