Liberalised remittances facilities to NRIs/PIO and Foreign Nationals - FEMA - 062

Liberalised remittances facilities to NRIs/PIO and Foreign Nationals RESERVE BANK OF INDIA FOREIGN EXCHANGE DEPARTMENT CENTRAL OFFICE MUMBAI - 400 001 January 31, 2004 RBI/2004/36 A.P.(DIR Series) Circular No.62 To All Authorised Dealers in Foreign Exchange Madam / Sirs, Liberalised remittances facilities to NRIs/PIO and Foreign Nationals · Amendments to FEMA Regulations · Clarificatory Guidelines Attention of Authorised Dealers is invited to paragraph 4 of A.P.(DIR Series) Circular No.67 dated January 13, 2003, permitting them to allow remittances upto USD 1 million, per calendar year, out of balances held by NRIs/PIO/Foreign Nationals (including retired employees or non-resident widows of Indian citizens) in NRO accounts/sale proceeds of assets, on production of the following documents : i. an undertaking ii. a certificate by the person making remittance as stipulated in A.P.(DIR Series) Circular No.27 dated September 28, 2002 read with A.P.(DIR Series) Circular No.56 dated November 26, 2002. 2. The relevant amendments to the Foreign Exchange Management (Remittance of Assets) Regulations, 2000 notified vide Notification No.FEMA.13/2000-RB dated May 3, 2000 have since been issued vide Notification No.FEMA.97/2003-RB dated July 8, 2003, a copy of which is enclosed. 3. Clarifications on various aspects of the facility - eligibility criteria, purpose and the ceiling for repatriation, etc. are furnished in the Annexure. 4. Authorised Dealers may bring the contents of this circular to the notice of their constituents concerned. 5. 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). Yours faithfully, Grace KoshieChief General Manager Encl.: As above Annexure [A.P.(DIR Series Circular) No.62 dated January 31, 2004] Facilities for remittance of assets held in India by Non-Residents (A) Who is eligible? The repatriation facility is available to the following category of persons: (I) Foreign national [other than a citizen of Nepal or Bhutan or a Person of Indian Origin (PIO)] who: i. has retired from an employment in India or ii. has inherited the assets from a person who was a resident in India or iii. A widow resident outside India and has inherited assets of her deceased husband who was an Indian Citizen, resident in India. (II)NRI/PIO who acquired the assets in question, out of rupee resources when he was in India or by way of legacy/inheritance from a person who was a resident in India. (B) Funds/assets eligible for repatriation (a) sale proceeds of immovable property, (b) assets acquired by way of Inheritance/legacy (c) a deposit with a bank or a firm or a company, (d) provident fund balance or superannuation benefits, (e) amount of claim or maturity proceeds of insurance policy, (f) sale proceeds of shares, securities, (g) any other asset held in India, in accordance with the provisions of the Act or Rules or Regulations made thereunder (as defined at Regulation 2(v) of Notification No.FEMA 13/2000-RB dated May 3, 2000). (C). Purpose of remittance The liberalised remittance facility is available for any bonafide purpose. (D). General conditions to be satisfied for repatriation of assets. i. Documentary evidence in support of the acquisition of the funds/assets proposed to be remitted. ii. Undertaking and Certification relating to tax compliance. (E). Specific conditions relating to repatriation of sale proceeds of immovable property. (i) Repatriation of sale proceeds of immovable property, acquired out of Rupee funds is available subject to the condition that the property should have been held for a minimum period of 10 years. If such a property acquired out of Rupee funds is sold after being held for less than 10 years, remittance can be made, if the sale proceeds have been held by the NRI / PIO for the balance period in NRO Account (Savings/ Term Deposits) or in any other eligible security, provided such investment is traced to the sale proceeds of the immovable property. (ii) There is no lock-in-period in respect of immovable property acquired by way of- (a) Inheritance/legacy. (b) Foreign currency funds (through inward remittance or by debit to FCNR/NRE accounts. (F). Remittance Procedure (i)In case, the remittance is to be made in more than one instalment, the remittances of all instalments should be remitted through the same authorised dealer. (ii) It is also clarified that the remittance facility is available even if the NRI/PIO/Foreign National is not maintaining any NRO account. However, the remittance should be routed through banking channel only, subject to tax compliance.