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Business Environment

Notes Exemption from Realization and Repatriation in Certain Cases

The provisions are not applied to the following situations:
1. Possession of foreign currency or foreign coins by any person up to such limit as the
Reserve Bank may specify;

2. Foreign currency account held or operated by such person or class of persons and up to the
limit which the Reserve Bank may specify;

3. Foreign exchange acquired or received before July 8, 1947 or any income arising or accruing
there on, which is held outside India by any person in pursuance of a general or special
permission granted by the Reserve Bank;
4. Foreign exchange held by a person resident in India up to such limit as the RBI may
specify, if such foreign exchange was acquired by way of gift or inheritance from a person
referred to in Clause(c) including any income arising there from;

5. Foreign exchange acquired from employment, business, trade, vocation, services,
honorarium, gifts, inheritance or any other legitimate means up to such limit as the RBI
may specify;
6. Such other receipts in foreign exchange as the RBI may specify.

9.2.6 Capital Account Transaction

Section 2(e) states that 'Capital Account Transaction' means:
1. A transaction that alters the assets or liabilities, including contingent liabilities outside
India of a person residing in India.
2. A transaction that alters the assets or liabilities in India of persons residing outside India.
3. Transfer or issue of any foreign security by a person residing in India.

4. Transfer or issue of any security by a person residing outside India.
5. Transfer or issue of any security or foreign security by any branch, office or agency in
India or a person residing outside India.

6. Any borrowing or lending in foreign exchanges in whatever form or by whatever name
known.
7. Any borrowing or lending in rupees in whatever form or by whatever name known
between a person residing in India and a person residing outside India.
8. Deposits between persons residing in India and person residing outside India.
9. Export, import or holding of currency or currency notes.
10. Transfer of immovable property outside India, other than lease not exceeding five years,
by a person residing in India.
11. Acquisition or transfer of immovable property in India, other than a lease not exceeding
five years, by a person resident outside India.

12. Giving of guarantee or surety in respect of any debt, obligation or other liability incurred,
by a person residing in India and owed to a person residing outside India, by a person
residing outside in India.

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