Foreign exchange remmittence

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 October 2013 An assessee is promised of a remmittence of a sum of Rs 54 crores by a friend of him in England as gift. He wants to know the formalities, procedures, and the approvals to be obtained from various authorities to receive the amount in India . Whether any permission is required from RBI or any other authorities in India and if so provide the detailsat the earliest.

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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16 October 2013 The Reserve Bank of India had announced a Liberalised Remittance Scheme (the Scheme) in February 2004 as a step towards further simplification and liberalization of the foreign exchange facilities available to resident individuals. As per the Scheme, resident individuals may remit up to USD 75,000 per financial year for any permitted capital and current account transactions or a combination of both. The Scheme was operationalised vide A.P. (DIR Series) Circular No. 64 dated February 4, 2004

Under the Liberalised Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to USD 75,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both.

he individual will have to designate a branch of an AD through which all the remittances under the Scheme will be made. The applicants should have maintained the bank account with the bank for a minimum period of one year prior to the remittance. If the applicant seeking to make the remittance is a new customer of the bank, Authorised Dealers should carry out due diligence on the opening, operation and maintenance of the account. Further, the AD should obtain bank statement for the previous year from the applicant to satisfy themselves regarding the source of funds. If such a bank statement is not available, copies of the latest Income Tax Assessment Order or Return filed by the applicant may be obtained. He has to furnish an application-cum-declaration in the specified format (Annex format is below) regarding the purpose of the remittance and declare that the funds belong to him and will not be used for the purposes prohibited or regulated under the Scheme.

Annexure

Application cum Declaration for purchase of foreign exchange under the Liberalised Remittance Scheme of USD 75,000 for Resident individuals

(To be completed by the applicant)

I. Details of the applicant

a. Name …………………………..
b. Address…………………………
c. Account No……………………..
d. PAN No………………………….

II. Details of the foreign exchange required

1. Amount (Specify currency)………………………………
2. Purpose ……………………………………………………

III. Source of funds: ………………………………………….

IV. Nature of instrument

Draft………………………..
Direct remittance…………

V. Details of the remittance made under the Scheme in the financial year (April- March) 20.. – 20..

Date :………………
Amount :………….

VI. Details of the Beneficiary

1. Name ……………………..
2. Address ……………………
3. Country ……………………
4*. Name and address of the bank……………………….
5*. Account No……………………………………………..
(* Required only when the remittance is to be directly credited to the bank account of the beneficiary)

This is to authorize you to debit my account and effect the foreign exchange remittance/ issue a draft as detailed above. (strike out whichever is not applicable).

Declaration

I, ………………. …………(Name), hereby declare that the total amount of foreign exchange purchased from or remitted through, all sources in India during the financial year as per item No. V of the Application, including loan extended or gift made in rupees credited to NRO account of non-resident close relative(s), is within the limit of USD 75,000 (US Dollar Seventy Five thousand only), which is the limit prescribed by the Reserve Bank for the purpose and certify that the source of funds for making the said remittance belongs to me and will not be used for prohibited purposes.

Signature of the applicant

(Name)

Certificate by the Authorised Dealer

This is to certify that the remittance is not being made by/ to ineligible entities and that the remittance is in conformity with the instructions issued by the Reserve Bank from time to time under the Scheme.

Name and designation of the authorised official:

Place:
Signature:

Date: Stamp and Seal