Module: | MODULE A: INTERNATIONAL BANKING
Q32: Consider the following statements regarding expatriate rules and the repatriation of foreign exchange:
Statement 1: Foreign nationals who are strictly deputed to an Indian branch of a foreign company, receiving their entire salary from the overseas parent company, are fully eligible to utilize the 250,000 US Dollars limit for independent wealth transfer.
Statement 2: A resident individual who acquires foreign exchange but does not utilize it for the intended purpose must surrender the unspent amount to an authorised bank within 180 days.
Statement 3: Resident individuals who make overseas direct investments are permitted to retain the capital gains and dividend income generated from these investments in a foreign currency account abroad indefinitely.
Which of the statements given above are incorrect?
Statement 2: A resident individual who acquires foreign exchange but does not utilize it for the intended purpose must surrender the unspent amount to an authorised bank within 180 days.
Statement 3: Resident individuals who make overseas direct investments are permitted to retain the capital gains and dividend income generated from these investments in a foreign currency account abroad indefinitely.
Which of the statements given above are incorrect?
✅ Correct Answer: B
The correct answer is B. Statements 1 and 3 are incorrect.
The remittance framework maintains strict boundaries on capital outflows.
Structurally, the scheme is designed for Indian residents generating wealth within the country.
Statement 1 is incorrect because foreign nationals or expatriates living in India on employment cannot utilize the 250,000 US Dollars limit for independent wealth transfer if their income strictly originates from an overseas parent company.
They can remit their net Indian salary under general permission, but cannot tap into the resident scheme limit.
Statement 3 is incorrect due to the strict repatriation rules designed to prevent unchecked capital flight.
Investors generating dividends or capital gains from overseas assets funded via this scheme must repatriate the realized earnings back to India within 180 days; they cannot retain it abroad indefinitely.
Statement 2 is correct.
Any unspent foreign exchange drawn for travel or current account purposes must be surrendered to an authorised bank within 180 days of return to India.
The remittance framework maintains strict boundaries on capital outflows.
Structurally, the scheme is designed for Indian residents generating wealth within the country.
Statement 1 is incorrect because foreign nationals or expatriates living in India on employment cannot utilize the 250,000 US Dollars limit for independent wealth transfer if their income strictly originates from an overseas parent company.
They can remit their net Indian salary under general permission, but cannot tap into the resident scheme limit.
Statement 3 is incorrect due to the strict repatriation rules designed to prevent unchecked capital flight.
Investors generating dividends or capital gains from overseas assets funded via this scheme must repatriate the realized earnings back to India within 180 days; they cannot retain it abroad indefinitely.
Statement 2 is correct.
Any unspent foreign exchange drawn for travel or current account purposes must be surrendered to an authorised bank within 180 days of return to India.