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Foreign Exchange Account  
          Persons resident in India are permitted to maintain foreign currency accounts in India under following two schemes:

1. EEFC Accounts:

           To avoid exchange loss on conversion of foreign exchange into Indian Rupee & Rupee into foreign exchange, residents can retain up to 50% of foreign currency remittances received from abroad in a foreign currency account, viz., EEFC account, with an authorized dealer in India.

          Funds held in EEFC account can be utilized for current account transactions and also for approved capital account transactions as specified by the extant Rules/Regulations/Notifications/Directives issued by the Government/RBI from time to time.

2. RFC Accounts:

          Returning Indians, i.e., those Indians, who were non-residents earlier, and are returning now for permanent stay, are permitted to open, hold and maintain with an authorized dealer in India a Resident Foreign Currency (RFC) Account to keep their foreign currency assets.

          Assets held outside India at the time of return can be credited to such accounts. The foreign exchange (i) received or acquired as gift or inheritance from a person referred to sub-section (4) of section 6 of FEMA,1999 or (ii) referred to in clause (c) of section 9 of the Act or acquired as gift or inheritance therefrom may also be credited to this account.

          The funds in RFC account are free from all restrictions regarding utilization of foreign currency balances including any restriction on investment outside India. The facility is also available to residents provided foreign exchange to be credited to such account is received out of certain specified type of funds/accounts.

3. RFC (Domestic)Account:

          A person resident in India can open, hold and maintain with an authorized dealer in India, a Resident Foreign Currency (Domestic) Account, out of foreign exchange acquired in the form of currency notes, Bank notes and travelers cheques from any of the sources like, payment for services rendered abroad, as honorarium, gift, services rendered or in settlement of any lawful obligation from any person not resident in India.

          The account may also be credited with/opened out of foreign exchange earned like proceeds of export of goods and/or services, royalty, honorarium, etc., and/or gifts received from close relatives (as defined in the Companies Act) and repatriated to India through normal banking channels by resident individuals.

  • Can a person resident in India hold assets outside India?

    In terms of sub-section 4, of Section (6) of the Foreign Exchange Management Act, 1999, a person resident in India is free to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India.
  • What is the liberalized Remittance Scheme of USD 25,000?

    This is a new facility extended to all resident individuals under which they may freely remit up to USD 25,000 per calendar year for any permissible current or capital account transaction or a combination of both.
  • Who is eligible to avail of this Liberalized Remittance Facility?

    The facility is available to resident individuals only.
  • Is there any frequency for the remittance?

    Resident individuals can avail of the remittance facility under the Scheme once in a calendar year.
  • What are the purpose/s for which remittance can be made under the Scheme?

    This facility is available for making remittance/s for any permissible current or capital account transaction or a combination of both. It is not available for purposes specifically prohibited (Schedule I) or regulated by the Government of India (Schedule II) of Foreign Exchange Management (Current Account Transactions) Rules, 2000.
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