Regulation 4 - Prohibition - Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000

4. Prohibition :- Save as otherwise provided in the Act, rules or regulations made thereunder, (a) no person shall undertake or sell or draw foreign exchange to or from an authorised person for any capital account transaction, 5 [PROVIDED that- (a) subject to the provisions of the Act or the rules or regulations or directions or orders made or issued thereunder, a resident individual may, draw from an authorized person foreign exchange not exceeding USD 250,000 per financial year or such amount as decided by Reserve Bank from time to time for a capital account transaction specified in Schedule I . Explanation: Drawal of foreign exchange as per item number 1 of Schedule III to Foreign Exchange Management (Current Account Transactions) Rules, 2000 dated 3rd May, 2000 as amended from time to time, shall be subsumed within the limit under proviso (a) above. (b) Where the drawal of foreign exchange by a resident individual for any capital account transaction specified in Schedule I exceeds USD 250,000 per financial year, or as decided by Reserve Bank from time to time as the case may be, the limit specified in the regulations relevant to the transaction shall apply with respect to such drawal. PROVIDED FURTHER that no part of the foreign exchange of USD 250,000, drawn under proviso (a) shall be used for remittance directly or indirectly to countries notified as non-cooperative countries and territories by Financial Action Task Force (FATF) from time to time and communicated by the Reserve Bank of India to all concerned.] (b) no person resident outside India shall make investment in India , in any form, in any company or partnership firm or proprietary concern or any entity, whether incorporated or not, which is engaged or proposes to engage - (i) in the business of chit fund, or (ii) as Nidhi Company , or (iii) in agricultural or plantation activities or (iv) in real estate business, or construction of farm houses or (v) in trading in Transferable Development Rights (TDRs). 7 [ (c) No person resident in India shall undertake any capital account transaction which is not permissible in terms of Order S.O. 1549(E) dated April 21, 2017, as amended from time to time, of the Government of India, Ministry of External Affairs, with any person who is, a citizen of or a resident of Democratic People s Republic of Korea, or an entity incorporated or otherwise, in Democratic People s Republic of Korea, until further orders, unless there is specific approval from the Central Government to carry on any transaction. (d) The existing investment transactions, with any person who is, a citizen of or resident of Democratic People s Republic of Korea, or an entity incorporated or otherwise in Democratic People s Republic of Korea, or any existing representative office or other assets possessed in Democratic People s Republic of Korea, by a person resident in India, which is not permissible in terms of Order S.O. 1549(E) dated April 21, 2017, as amended from time to time, of the Government of India, Ministry of External Affairs shall be closed/liquidated/disposed/settled within a period of 180 days from the date of issue of this Notification, unless there is specific approval from the Central Government to continue beyond that period. ] Explanation 6 [ (i) For the purpose of this regulation, real estate business shall not include development of townships, construction of residential/commercial premises, roads or bridges and Real Estate Investment Trusts (REITs) registered and regulated under the SEBI (REITs) Regulations 2014 ] 4 [(ii) The Registrar of Chits or an officer authorised by the state Government in this behalf, may, in consultation with the State Government concerned, permit any chit fund to accept subscription from Non-resident Indians. Non-resident Indians shall be eligible to subscribe, through banking channel and on non- repatriation basis, to such chit funds, without limit subject to the conditions stipulated by the Reserve Bank of India from time to time] ************ Note : 1. Has been substituted vide Notification No. G.S.R. 14(E) dated 10/10/2007 before it was inserted vide Notification No. 110/2004 dated 5/2/2004 as, (a) subject to the provisions of the Act or the rules or regulations or directions or orders made or issued thereunder, a resident individual may draw from an authorized person foreign exchange not exceeding US $ 25,000 per calendar year for a capital account transaction specified in Schedule I; (b) where the drawal of foreign exchange by a resident individual for any capital account transaction specified in Schedule I exceeds US $ 25,000 per calendar year, the limit specified in the regulations relevant to the transaction shall apply with respect to the drawal. Provided further that no part of the foreign exchange of US $ 25,000 drawn under clause (a) of the first proviso shall be used for remittance directly or indirectly to countries notified as non-cooperative countries and territories by Financial Action Task Force (FATE) from time to time and communicated by the Reserve Bank of India to all concerned. 2. Substituted vide NOTIFICATION NO. 282/2013-RB dated August 14, 2013 before it was read as, 1 Provided that- (a) subject to the provisions of the Act or the rules or regulations or directions or orders made or issued thereunder, a resident individual may, draw from an authorized person foreign exchange not exceeding USD 50,000 per financial year with effect from December 20, 2006, USD 100,000 per financial year with effect from May 8, 2007 and USD 2,00,000 per financial year with effect from September 26, 2007, for a capital account transaction specified in Schedule I. Explanation: Drawal of foreign exchange by resident individuals towards remittances of gift or donations as per item No. 3 and 4 of Schedule III to Foreign Exchange Management (Current Account Transactions) Rules, 2000 dated 3rd May, 2000 as amended from time to time, shall be subsumed within the limit under proviso (a) above ; (b) where the drawal of foreign exchange by a resident individual for any capital account transaction specified in Schedule I exceeds USD 50,000 or USD 100,000 or USD 200,000, as the case may be, per financial year, the limit specified in the regulations relevant to the transaction shall apply with respect to such drawal. Provided further that no part of the foreign exchange of USD 50,000 or USD 100,000 or USD 200,000, as the case may be, drawn under proviso (a) shall be used for remittance directly or indirectly to countries notified as non-co-operative countries and territories by Financial Action Task Force (FATF) from time to time and communicated by the Reserve Bank of India to all concerned. 3. Substituted vide Notification No. FEMA. 311/2014-RB, dated June 24, 2014 , before it was read as, 2 [ Provided that (a) subject to the provisions of the Act or the rules or regulations or directions or orders made or issued thereunder, a resident individual may, draw from an authorized person foreign exchange not exceeding USD 75000 per financial year or such amount as decided by Reserve Bank from time to time for a capital account transaction specified in Schedule I. Further, any remittances for acquisition of immovable property outside India under the Scheme shall not be permitted. Explanation : Drawal of foreign exchange by resident individuals towards remittances of gift or donations as per item No. 3 and 4 of Schedule III to Foreign Exchange Management (Current Account Transactions) Rules, 2000 dated 3rd May 2000 as amended from time to time, shall be subsumed within the limit under proviso (a) above; (b) where the drawal of foreign exchange by a resident individual for any capital account transaction specified in Schedule I exceeds USD 75000 or as decided by Reserve Bank from time to time as the case may be, per financial year, the limit specified in the regulations relevant to the transaction shall apply with respect to such drawal : Provided further that no part of the foreign exchange of USD 75000 or as decided by Reserve Bank from time to time as the case may be, drawn under proviso (a) shall be used for remittance directly or indirectly to countries notified as non-co-operative countries and territories by Financial Action Task Force (FATF) from time to time and communicated by the Reserve Bank of India to all concerned.] 4. Existing explanation shall be numbered as (i) and (ii) new explanation inserted vide Not. 337/2015-RB - Dated 2-3-2015 5. Substituted vide Not. 341/2015-RB - Dated 26-5-2015 , before it was read as, 3 [PROVIDED that (a) subject to the provisions of the Act or the rules or regulations or directions or orders made or issued there under, a resident individual may draw from an authorized person foreign exchange not exceeding USD 125000 per financial year or such amount as may be decided by Reserve Bank from time to time for a capital account transaction specified in Schedule I. Explanation: Drawal of foreign exchange by resident individuals towards remittances of gift or donations as per item Nos. 3 and 4 of Schedule III to Foreign Exchange Management (Current Account Transactions) Rules, 2000 dated 3rd May, 2000, as amended from time to time, shall be subsumed within the limit under proviso (a) above. (b) Where the drawal of foreign exchange by a resident individual for any capital account transaction specified in Schedule I exceed USD 125000 per financial year, or as decided by Reserve Bank from time to time, as the case may be, the limit specified in the regulations relevant to the transaction shall apply with respect to such drawal. PROVIDED FURTHER that no part of the foreign exchange of USD 125000 drawn under proviso (a) shall be used for remittance directly or indirectly to countries notified as non-co-operative countries and territories by Financial Action Task Force (FATF) from time to time and communicated by the Reserve Bank of India to all concerned. ] 6. Substituted vide Not. 345/2015-RB - Dated 16-11-2015 , before it was read as, [ 4 (i)]: - For the purpose of this regulation, real estate business shall not include development of townships, construction of residential/commercial premises, roads or bridges. 7. Inserted vide NOTIFICATION No. FEMA 1/2019-RB dated 07-03-2019