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Discussion > LAW > Others >

SOMETHING ABOUT INWARD REMITTANCE

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Company Secretary and Compliance Officer

[ Scorecard : 99855]
Posted On 30 October 2010 at 13:56 Report Abuse

 Introduction: 

 

Receipt of foreign exchange in India is called Inward remittance. Apart from exports there are other transactions, which generate inward remittance. For example Non-resident Indian staying abroad may remit foreign exchange to their relatives in India. Inward remittances are usually in the nature of foreign currency notes, foreign currency traveller cheques, foreign currency cheques / foreign currency demand drafts and inward telex transfers.

 

 

Exchange Management Regulations

 

1.  There are no restrictions on receiving remittances from abroad through authorised dealers in foreign exchange in India.

 

a.   Persons resident in India are also permitted to receive directly from persons resident outside India foreign exchange in the form of bank drafts or traveller’s cheques issued outside India or cheques drawn on banks situated outside India provided the instruments so received are surrendered to an authorised dealer in foreign exchange in India within a period of seven days from date of receipt.

 

b.   Persons resident in India are also permitted to receive from any person resident outside India and who is on a visit to India payment in foreign currencies for services rendered or in settlement of any lawful obligations - subject to the condition that the foreign currencies so received will be surrendered to an authorised dealer in foreign exchange within seven days of receipt.

 

(Note: General permission has been given by RBI to persons resident in India to retain with them foreign currency up to the value of USD 2,000. In other words, the amount held by residents should not exceed USD 2,000 or its equivalent at any point of time. The amount, which is in excess of USD 2,000 mentioned above, must be surrendered to an authorised dealer within a period of seven days of acquisition. Needless to state that the foreign exchange mentioned above should have been acquired by the resident in conformity with the provisions of the FEMA).

 

c.   Exporters in India are permitted to receive directly from the overseas buyers during their visit to India foreign exchange in the form of bank drafts, personal cheques, currency notes, pay orders, banker’s cheques and traveller’s cheques in payment of goods already exported or to be exported. The exporters must surrender these foreign currency instruments to an authorised dealer in foreign exchange in India within a period of seven days from date of receipt. Authorised dealers have been advised by RBI to treat such payments as realisation of export proceeds.

 

d.  If the amount of inward remittance exceeds Rs.1,00,000 (or its equivalent in foreign exchange), then the purpose of remittance should be ascertained by the authorised dealer. This information should be reported to RBI in the supplementary statement annexed to R-Returns.

 

e.  Authorised dealers should issue foreign Inward Remittance Certificate (FIRC) in the prescribed form if  requested by the beneficiary.

      

(i).                If the amount received exceeds Rs.15, 000/- in value, then the FIRC should be issued on security paper. The FIRC forms should be printed on security paper. If, however, the amount received from abroad does not exceed Rs.15, 000, then the FIRC may be issued on the printed letterhead with logo of the authorized dealer instead of on the security paper.

 

 (ii).          Exporters may ask for certificates to be issued by authorised dealers for submission to the office of the Director General of Foreign Trade (DGFT). Authorised dealers may issue such certificates - after verifying all the required particulars.

 

     (iii).          Sometimes customers may ask for inward remittance certificates for submission to the Income tax Department. Authorised dealers may also comply with such requests.

 

      (iv).       Whenever exporters receive advance remittances, it is their practice to obtain FIRC for the amount so received from the bank concerned. Subsequently as and when export is made and documents are presented by the exporter, the FIRC mentioned above should be called for in original and necessary endorsement made thereon by the authorised dealer.

 

           (v).       Whenever inward remittances are received for opening of a NRE or FCNR account (or for funding these accounts) FIRCs should not be issued by authorised dealers.

 

2.  Persons who are receiving inward remittance from abroad may, if they so desire, request the bank concerned to keep a portion of the amount in foreign currency in an account styled as Exchange Earners Foreign Currency account (EEFC). The limit is 70 per cent of the inward remittance in the case of 100 per cent export oriented units and 50% in other cases. The EEFC facility is available not only for exporters but also for any person who is receiving an inward remittance from abroad. Therefore, before converting the inward remittance amount into Indian rupees, it is advisable to ascertain from the beneficiary of the remittance whether the entire amount may be converted into Indian rupees or any portion thereof is required to be held in an EEFC account.

 

3.  Inward remittances through normal banking channel are freely permitted under the Foreign Exchange Management Act 1999 (FEMA). There is, however, another law in the country and it is called Foreign Contribution (Regulation) Act, 1976. This law is administered by the Ministry of Home Affairs, Government of India, New Delhi and not by Reserve Bank of India. Beneficiaries of inward remittances are advised to comply with the provisions of this law wherever considered necessary. This law applies to Associations having a definite cultural, economic, educational, religious or social programme. These types of associations must be registered with the Home Ministry of Central Government before they could accept foreign contribution. Branches should communicate with IBD Chennai and obtain prior approval and instructions before opening accounts for such associations when receiving inward remittances from abroad.



Total thanks : 4 times

Online classes for CA CS CMA



CA Navin Jain
MANAGER (FINANCE & ACCOUNTS)

[ Scorecard : 11636]
Posted On 30 October 2010 at 14:04

THANKS ANKUR BHAI FOR USABLE INFORMATION



Total thanks : 1 times




Ankur Garg
Company Secretary and Compliance Officer

[ Scorecard : 99855]
Posted On 30 October 2010 at 14:18

Always welcome Navin....



Total thanks : 1 times



steven
sssssss

[ Scorecard : 22]
Posted On 06 January 2011 at 17:59

Dear Sir, Im really happy to read ur article. Sir i have a Query on remittance.

Im an indian and NRI and my wife if chinese citizen. now she want to send me funds to india from china in my normal saving bank account through normal banking channel to buy a residential property in india. I want to know if there is any limit of amount in inward remittance ? and by the law what reason can  i show while receiving the funds ? can i show these funds are to buy a property in india? or can i show these funds is a gift from my wife? any limit of amount on gift inward remittance?

Pls advise.

Thanks,Best Regards- Steven




steven
sssssss

[ Scorecard : 22]
Posted On 06 January 2011 at 18:17

Dear Sir, Im really happy to read ur article. Sir i have a Query on remittance.

Im an indian and NRI and my wife is a chinese citizen. now she want to send me 300,000$ dollars to india from china in my normal saving bank account through normal banking channel to buy a residential property in india. I want to know if there is any limit of amount in inward remittance ? and by the law what reason can  i show while receiving the funds ? can i show these funds are to buy a property in india? or can i show these funds is a gift from my wife? any limit of amount on gift inward remittance? is there any tax on the inward remittance received? any tax on funds received?

Pls advise.

Thanks,Best Regards- Steven




RAMESH KUMAR VERMA
CS PURSUING

[ Scorecard : 43023]
Posted On 27 January 2011 at 14:20

 

DEAR STEVAN ,

PLEASE OPEN A ‘NRI ACCOUNTS’,  These can, therefore, be opened only at our Indian branches. The account opening form is available on the website of our Indian operations www.statebankofindia.com, lower left side of the home page, through the ‘Forms’ option.

For more information, please refer to the ‘NRI BANKING’ section on the home page or the website referred above.




VIMAL
ASSISTANT MANAGER FINANCE

[ Scorecard : 57]
Posted On 21 April 2011 at 22:41

Hi Ankur Ji,

Very useful information. Please clarify is their any precondition from the bank that details need to be submitted before the credit in account or credit can be given by the bank and thereafter the required declaration like purpose can be given by beneficiary to bank




manjunath
Manager

[ Scorecard : 22]
Posted On 12 January 2012 at 19:19

Dear Sir, I have received 3600 USD as commission from one of the chinese supplier in 2011 to my savings bank account. Please help me to know if there is any tax that i have to pay for it. Is it legal to get commission from abroad? Is it objected by RBI. Please advice. THanks in advance.



Roger Anand J
Self Empolyed

[ Scorecard : 25]
Posted On 06 March 2012 at 13:06

Hello Sir Ankur Garg ,

 

 I withdrawned money form my paying company from US to my bank account INDIA  through wire transfer .What is RIR in my bank statement means ? For previous transaction it appear as FIR . I think it is Foreign Inward Remittance . But What is RIR sir ?

Thanks in advance

-ROGER


 




Rajesh Chudasama
Associate Professor

[ Scorecard : 21]
Posted On 06 March 2012 at 15:14

DeaR Ankur Sir,

I am basically a Doctor ( Government Medical College) and I got a foreign transaction in my account this financial year for offering my expert evaluation services.

My query is, Should I get the FIRC or CFIR for my Saving bank account from ICICI bank in which I got the transcation or not?

Is there any rule to produce this certificate with Income tax return filing?

Please guide me.

WIth regards

Dr. Rajesh K Chudasama



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