Module: | MODULE A: INTERNATIONAL BANKING
Q45: Consider the following statements concerning corporate travel expenses and specialized training under the foreign exchange rules:
Statement 1: If an employee travels abroad for a business conference and the expenses are completely borne by the employer company, these expenses are not deducted from the personal 250,000 US Dollars annual limit of that employee.
Statement 2: A resident individual traveling abroad for specialized professional training can draw foreign exchange under their personal scheme limit to cover their tuition and living expenses.
Statement 3: Corporate entities are legally permitted to pool the individual limits of their employees to remit funds for establishing a corporate branch office overseas.
Which of the statements given above are correct?
Statement 2: A resident individual traveling abroad for specialized professional training can draw foreign exchange under their personal scheme limit to cover their tuition and living expenses.
Statement 3: Corporate entities are legally permitted to pool the individual limits of their employees to remit funds for establishing a corporate branch office overseas.
Which of the statements given above are correct?
✅ Correct Answer: A
The correct answer is A. Statements 1 and 2 are correct, while Statement 3 is incorrect.
The regulatory rules draw a distinct line between personal expenditure and corporate operations.
Structurally, when a resident employee undertakes a business trip, attends an international conference, or goes on a deputation where the corporate employer bears the entire cost, the transaction is treated as a corporate current account remittance.
Therefore, it does not consume or impact the employee's personal 250,000 US Dollars annual limit under the individual scheme, making Statement 1 accurate.
Statement 2 is correct because specialized professional training or personal skill development undertaken independently by a resident falls perfectly under the permissible current account facilities of the personal scheme.
Statement 3 is legally incorrect.
The Liberalised Remittance Scheme is exclusively available to individuals.
Corporate entities, partnership firms, and trusts cannot access this scheme, nor can they pool or hijack the personal limits of their employees to fund corporate endeavors such as opening branch offices or subsidiaries abroad.
The regulatory rules draw a distinct line between personal expenditure and corporate operations.
Structurally, when a resident employee undertakes a business trip, attends an international conference, or goes on a deputation where the corporate employer bears the entire cost, the transaction is treated as a corporate current account remittance.
Therefore, it does not consume or impact the employee's personal 250,000 US Dollars annual limit under the individual scheme, making Statement 1 accurate.
Statement 2 is correct because specialized professional training or personal skill development undertaken independently by a resident falls perfectly under the permissible current account facilities of the personal scheme.
Statement 3 is legally incorrect.
The Liberalised Remittance Scheme is exclusively available to individuals.
Corporate entities, partnership firms, and trusts cannot access this scheme, nor can they pool or hijack the personal limits of their employees to fund corporate endeavors such as opening branch offices or subsidiaries abroad.