All Banks Authorised to Deal in Foreign Exchange
Amendments to FEMA Regulations – Remittance of assets by Non-Resident Indians (NRIs)/Persons of Indian Origin (PIO)
Attention of banks authorised to deal in foreign exchange is invited to Regulation 4(3) of the Notification No. FEMA 13/2000-RB dated May 3, 2000, as amended from time to time and , A.P. (DIR Series) Circular No.67 dated January 13, 2003, in terms of which a NRI/PIO is permitted to remit an amount not exceeding USD one million, per calendar year, out of balances held in NRO accounts/sale proceeds of assets/the assets in India acquired by him by way of inheritance/legacy, on production of certain documents. In this connection, our A.P. (DIR Series) Circular No.67 dated January 13, 2003 may also be seen.
2. On a review, it has been decided to extend the facility available under legacy / inheritance to an arrangement under a "settlement" whereby the property is passed on to the legatees, during the lifetime of the owner/parent who normally retains a life interest in the property. It is clarified that the settlement is also a mode of inheritance from the parent, the only difference being that the property under the settlement passes to the beneficiary on the death of the owner/parent without any legal procedures/hassles and helps in avoiding delay and inconvenience in applying for probate, etc
3. Accordingly, banks authorized to deal in foreign exchange are authorized to allow remittance facility to a NRI/PIO, up to USD one million, per calendar year, out of balance in the NRO account; sale proceeds of assets; the assets in India acquired by way of inheritance/ legacy and assets acquired out of settlement, for all bonafide purposes, to the satisfaction of the banks, on production of an undertaking by the remitter and a certificate by a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes vide their circular No. 10/2002 dated October 9, 2002 (copy enclosed). The may allow remittance facility to a NRI/PIO under a deed of settlement made either by his parents or close relative (as defined in Section 6 of the Companies Act, 1956). The remittance facility would be is available only on demise of the settler.
4. The existing guidelines regarding remittance of sale proceeds of immovable property to a citizen of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan shall continue.
5. 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 been issued vide Notification No .FEMA 119/2004-RB dated June 29, 2004, a copy of which is enclosed.
56. Authorised Dealers may bring the contents of this circular to the notice of their constituents concerned.
67. 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) and are without prejudice to permissions/approvals, if any, required under any other law.
(F. R. Joseph)
Chief General Manager
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