RBI FEMA Guidelines on Foreign Currency Possession and Assets Held Abroad (2015 Regulations):

The Reserve Bank of India (RBI) had earlier issued guidelines on the Foreign Currency Possession and Assets Held Abroad (2015 Regulations). These rules govern how Indian residents and authorized entities can hold foreign currency under FEMA, 1999. Let us understand these guidelines.

Possession and Retention of Foreign Currency: FEMA 11(R)/2015-RB

No Limit for Authorised Entities: According to Section 2(c) of FEMA, 1999, authorised dealers, money changers, offshore banking units, and others approved under Section 10(1) can hold unlimited foreign currency, as allowed by their license. 1. Foreign Coins: Anyone can keep foreign coins, and there is no limit on this. 2. Limit for Indian Residents: Indian residents can keep up to USD 2000 (or its equivalent) in foreign currency notes, bank notes, and traveller’s cheques. However, it is only allowed if the foreign exchange was received through the following sources:

• Spending on personal needs (not business) during a foreign trip.
• Gifts, honorarium, or service fees from a non-resident visiting India.
• Gifts or honorarium received while abroad.
• Unused foreign exchange legally taken from an authorised dealer for travel.

Special Exemption For Non-permanent Residents An indian Not permanently resident (persons living in India for specific employment or assignment for not more than three years) is allowed to hold any amount of foreign currency brought legally from abroad, without limit.

Regularisation of Undisclosed Foreign Assets – FEMA 348/2015-RB

This rule helps to promote compliance among Indian residents who have undeclared foreign assets. According to the Regulation 4, an Indian Resident who have undisclosed foreign assets, informs about it under Section 59 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (hereinafter referred as Black Money Act, 2015) and pays the tax amount and the penalty under Chapter VI of the Act, will not face any legal consequences under the Act. However, if such a person wants to hold such foreign assets, they must take approval from the RBI within 180 days from the date of declaration. Whether RBI approval is needed depends on the current FEMA rules.

Declaration Process of Undisclosed Income

The declaration is required to be made in Form-6, under Rule 9(1) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015, and submit it to the Principal Commissioner or the Commissioner of Income Tax Act. Not following these guidelines can result in various consequences, such as penalties, hefty fines and criminal proceedings for violating the rules.