Module: General Practice
Q74: Consider the following statements:
Assertion (A): An Authorized Person must insist on a Currency Declaration Form (CDF) if a foreign tourist wishes to exchange USD 6,000 in currency notes into Indian Rupees.
Reason (R): Any person bringing foreign exchange into India exceeding USD 5,000 in currency notes, or USD 10,000 in aggregate (notes + TCs), is required to declare it to Customs authorities upon arrival.
Reason (R): Any person bringing foreign exchange into India exceeding USD 5,000 in currency notes, or USD 10,000 in aggregate (notes + TCs), is required to declare it to Customs authorities upon arrival.
✅ Correct Answer: A
1. Reason (R) - The Law: Under Customs/FEMA rules, a declaration in Form CDF (Currency Declaration Form) is mandatory if: Aggregate forex (Notes + TCs) > USD 10,000.
OR Foreign Currency Notes alone > USD 5,000.
2. Assertion (A) - The Check: Since the tourist wants to exchange USD 6,000 in notes (which exceeds the USD 5,000 threshold), the Authorized Dealer must ask for the CDF to verify that the money was legally brought into the country and declared.
3. The Link: The AD uses the CDF (R) to validate the source of funds before encashment (A). Without CDF, the AD should not encash amounts exceeding these limits.
OR Foreign Currency Notes alone > USD 5,000.
2. Assertion (A) - The Check: Since the tourist wants to exchange USD 6,000 in notes (which exceeds the USD 5,000 threshold), the Authorized Dealer must ask for the CDF to verify that the money was legally brought into the country and declared.
3. The Link: The AD uses the CDF (R) to validate the source of funds before encashment (A). Without CDF, the AD should not encash amounts exceeding these limits.