What is the obligation to submit foreign currency?
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What is the obligation to submit 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.
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.
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.
- Letter of Credit: Meaning, Importance and Required Document
- Documents used in export trade its types and contents
- Restrictions on deposits to foreign currency accounts
- Foreign Exchange: Concept, Example and Needs
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