Foreign Exchange Management Act

Date : Oct 17, 2002                                                                          

Do You Know ?????

If you are a resident Indian, you can buy foreign exchange without taking permission from the Reserve Bank of India for certain purposes. These are :

For Private Travel

• You can avail of foreign exchange upto US$ 5,000 in any calendar year for tourism or private travel to any country other than Nepal and Bhutan.

For Visit to Nepal and Bhutan

• You can carry any amount of Indian currency while travelling to these countries, but you are not permitted to take Indian currency notes of denomination Rs.500 and above or buy any foreign exchange for visit to these countries.

For Study Abroad

• You can buy foreign exchange upto US$ 30,000 or upto the estimate from the institution abroad, whichever is higher, per academic year.

For Medical Treatment

• You can buy foreign exchange on the basis of simple declaration, upto US$ 50,000 to meet the expenses for medical treatment outside India. Banks are also permitted to release exchange required in excess of US$ 50,000, on the basis of estimate from a doctor or hospital overseas.

• You can also buy foreign exchange upto US$ 25,000 per person for meeting boarding/lodging/travel expenses of the patient and also the accompanying attendant.

For Employment Abroad

• You can buy foreign exchange upto US$ 5,000.

For Immigration

• You can buy foreign exchange upto US$ 5,000, on production of proof that you have already obtained immigration visa.

International Credit Cards

• You can use international credit cards/ATMs/debit cards while you are on holidays outside India to meet your expenses within the overall ceiling of US$ 5,000 in a calendar year.

• You can use your international credit card outside India for purchase of any item, the import of which is permitted into India.

• You can use your international credit card, while in India, for making payment in foreign exchange for purchase of books and other items through Internet.

Purchase of Foreign Exchange

• You can buy foreign exchange from any bank branch dealing in foreign exchange or full-fledged money changers provided they are also permitted to release exchange for business and private visits. If the rupee equivalent exceeds Rs.50,000/-, the entire payment has to be made by way of a crossed cheque/banker's cheque/pay order/demand draft only.

When to Buy

• You can buy foreign exchange 60 days ahead of the journey date. In case it is not possible to use the foreign exchange within the period of 60 days, it should be surrendered to a bank.

Surrender of Foreign Exchange on Return

• You can indefinitely retain foreign exchange upto US$ 2,000, in the form of foreign currency notes or travellers' cheques (TCs) for future use. Any foreign exchange in cash in excess of this sum, is required to be surrendered to a bank within 90 days and TCs within 180 days of return.

Foreign Coins

• You can retain foreign coins indefinitely without any limit.

Remittance for Miscellaneous Purposes upto US$ 500

• You can remit foreign exchange outside India upto US$ 500, for any permissible purpose, without production of any document provided the rupee equivalent is being paid by debit to your account, cheque or by demand draft

Gifts and Donations

• You can gift/donate upto US$ 5,000 every year.

Bringing in Foreign Exchange

• You can bring foreign exchange without any limit. If, however, the value of foreign currency in cash exceeds US$ 5,000 and/or the cash plus TCs exceed US$ 10,000 it should declared to the customs authorities at the airport in the currency declaration form (CDF), on arrival in India.

Earnings in Foreign Exchange

• You can retain all your earnings in foreign exchange through consultancy, lecture, etc., in an exchange earners' foreign currency (EEFC) account with a bank India.

Loan from NRI Relatives

• You can borrow from your close relatives, who are NRIs, upto US$ 250,000 which you can repay after one year.