NITIKA BACHHAWAT

Swiftscan – CA Inter
Foreign Exchange
Management Act, 1999

Dear Students.

This scanner contains all the

questions of
To stay updated with all videos we post follow
 RTP - May’ 24 & Sept’ 24
 Mock test papers
 PYQP – May’ 24 https://www.youtube.com/c/NitikaBachhawat
The scanner has been divided chapter
wise to make it easier for you to
follow. Do try to solve the questions
before looking into the answers.
https://www.instagram.com/nitikabachhawat/
Happy learning and stay motivated.

For pendrive classes contact

9831011194
https://t.me/lawqueries

Page 1
O
W
Mmx
hat Software
is thean
r. Ram, PrivateofLimited
meaning
advocate isGazette'
'Official
has a private
fraudulently ascompany
per the
deceived and having
hisprovisions
client its
theregistered
Mr.ofShyam, General office
Clauses
who was
in Bangalore
taking
Act, (Nov’
and is
his expert
1897? a wholly
advise
22) owned subsidiary
on taxation of Omx
matters. Now, Software
Mr. Ram Inc, to
is liable situated
a fine inforUSA.
acting
Mr. fraudulently
Rajat Kapoor, Mr. both under the
Shubham Advocates
and Mr. PeterAct,
are 1961 as well
directors as the
of Omx Income Private
Software Tax
Act, 1961.
Limited. Mr.State theand
Rajat provision as to whether
Mr. Shubham his offence
are Indian residentsiswhile
punishable under
Mr. Peter is athe both
non-
the Acts, as per the General Clauses Act, 1897. (RTP Nov’ 18)
resident and stays in USA. Mr. Peter is also a director in Omx Software Inc.
Mr. Rajat left India on 2nd November, 2021 for the purpose of looking after the
business of Omx Software Inc. Mr. Rajat came to back to India on 12th February, 2022
to meet his family and left India on 26th February, 2022 and went back to USA to look
after the business of Omx Software Inc. Mr. Rajat again visited India on 25th August,
2022 and stays in India for the whole year.

Omx Software Private Limited had availed a consultancy service from a company
situated in USA for development of software for the purpose of rendering service to its
customers situated in India.

Mr. Rajat had purchased a residential property in USA on 27th April, 2022 which was
self-occupied by him for his residential use. (RTP May’ 24)

Considering the provisions of the Foreign Exchange Management Act, 1999, which of
the following options correctly determines the residential status of Mr. Rajat Kapoor:
a) Mr. Rajat Kapoor to be treated as resident in India for Financial Year (FY)
2022-2023 and FY 2023-2024 since he stays in India for more than 182 days
b) Mr. Rajat Kapoor to be treated as non-resident in India for FY 2022-2023 since
he left India for the purpose of carrying business of Omx Software Inc and
resident for FY 2023-2024
c) Mr. Rajat Kapoor to be treated as non-resident for FY 2022-2023 and FY 2023-
2024
d) Mr. Rajat Kapoor to be treated as resident in India for FY 2022 2023 since he
stays in India for more than 182 days and non resident for FY 2023-2024

Answer: B

Page 2
Considering the provisions of the Foreign Exchange Management Act, 1999, how much
amount can company remit outside India:
a) Permissible amount remitted to US company for obtaining consultancy without
obtaining prior approval of RBI is USD 1,000,000 per project
b) Permissible amount remitted to US company for obtaining consultancy without
obtaining prior approval of RBI is USD 100,000 per project
c) Permissible amount remitted to US company for obtaining consultancy without
obtaining prior approval of RBI is USD 200,000 per project
d) Permissible amount remitted to US company for obtaining consultancy without
obtaining prior approval of RBI is USD 2,000,000 per project
Considering the provisions of the Foreign Exchange Management Act, 1999, in respect of
purchase of residential property by Mr. Rajat in USA which of the following statement is
correct?
a) Purchase of residential property by Mr. Rajat is a current account transaction
b) Mr. Rajat has to sell his property before returning to India permanently as he becomes
resident in subsequent years
c) Purchase of residential property by Mr. Rajat is neither capital account transaction nor
current account transaction
d) Purchase of residential property by Mr. Rajat is a capital account transaction

Answer: A
Answer: C

Page 3
Amit, an Indian resident during the Financial Year (FY) 2021-2022, decided to pursue
higher studies in Biotechnology in Switzerland. On 15th July 2022, he left India to begin
his two-year academic program. The determination of Amit’s residential status under the
Foreign Exchange Management Act (FEMA), 1999, for the Financial Years 2022-2023
and 2023-2024, is crucial to understand his obligations and entitlements concerning
foreign exchange transactions.

In terms of financial requirements, Amit needs USD 25,000 annually to cover his tuition
fees. Additionally, he requires USD 30,000 annually for incidental expenses and living
costs while studying abroad. Thus, his total annual requirement amounts to USD 55,000,
making it imperative to assess the provisions under the Foreign Exchange Management
Act, 1999, that govern the remittance of foreign.(MT)

On the basis of above facts and by applying applicable provisions of the Foreign
Exchange Management Act, 1999, therein, choose the correct answer (one out of four)
of the following MCQs (11-13) given herein under:

What would be Amit’s residential status for FY 2022-2023 under FEMA, 1999?
a) Resident in India
b) Non-Resident Indian (NRI)
c) Person of Indian Origin (PIO)
d) Overseas Citizen of India (OCI)

Answer: B

Page 4
What would be Amit’s residential status for FY 2023-2024 under FEMA, 1999?
a) Resident in India
b) Non-Resident Indian (NRI)
c) Person of Indian Origin (PIO)
d) Overseas Citizen of India (OCI)

Suppose now Amit wants more money for his living cost abroad. What is the maximum amount
that can still be remitted abroad per financial year under the Liberalized Remittance Scheme
(LRS)?
a) USD 100,000
b) USD 195,000
c) USD 200,000
d) USD 500,000

Answer: B
Answer: B

Page 5
Athlete Rajiv Sharma, a professional tennis player from India, achieved remarkable
success by winning a prestigious international tennis tournament held in Paris, France.
As a result of his victory, he received a prize money of $150,000 from the event
organizers. Rajiv was excited about his winnings and planned to use a portion of the
prize money to fund his training and future tournaments abroad.
Rajiv decided to remit $150,000 to his personal account in France to manage his finances
and cover his training expenses. However, before proceeding, he needed to ensure that
the remittance complied with the Foreign Exchange Management Act (FEMA), 1999,
specifically concerning the remittance of prize money or sponsorship of sports activities
abroad.
Under FEMA regulations, individuals other than international, national, or state-level
sports bodies are subject to specific guidelines when remitting amounts exceeding
$100,000. Rajiv was aware that the amount involved in his case exceeded this threshold
and sought advice on the necessary steps and compliance.
Enumerate in the given instance, according to FEMA regulations, what must Rajiv
Sharma do if he wishes to remit prize money exceeding US $100,000 abroad?
a) Remit the amount directly without any additional requirements.
b) Obtain approval from Paris Government before remitting the amount
c) Only provide proof of winning the prize
d) Require prior approval of Ministry of Human Resource Development
(Department of Youth Affairs and Sports) (MT)

Answer: D

Page 6
Ms. Shalini Gupta had enrolled her for management course of three years with IIM,
Ahmedabad. Out of three years, two years of educational course would be provided at
the campus of IIM, Ahmedabad and one year of educational course would be provided
at University of Auckland under student exchange program. Ms. Shalini Gupta is
required to pay tuition fee of `10 lakh directly to IIM, Ahmedabad for two years course
and USD 200,000 to University of Auckland.

Ms. Shalini had left India on 20th August 2022 to complete her degree from University
of Auckland. In the last month of final year of the course, she got an offer from one of
the reputed company situated in Auckland and had accepted the offer and she decided to
work there. On 1st September 2023, Ms. Shalini had visited India for 30 days to meet
her family and on 1st October 2023 had left India to carry on her employment.

Considering the provisions of Foreign Exchange Management Act, 1999, which of the
below mentioned options correctly determined the residential status of Ms. Shalini
Gupta:

a) Ms. Shalini Gupta to be treated as resident in India for Financial Year (FY) 2023-
2024 and FY 2024-2025.
b) Ms. Shalini Gupta to be treated as resident in India for FY 2022-2023 and FY
2023-2024.
c) Ms. Shalini Gupta to be treated as non-resident for FY 2023-2024 and FY 2024-
2025 as she left India for higher studies.
d) Ms. Shalini Gupta to be treated as resident in India for FY 2023-2024 since she
stays in India for more than 182 days and non-resident for FY 2024-2025. (MT)

Answer: C

Page 7
Kite Sports Academy, a private coaching club, provides coaching for cricket, football
and other similar sports. It coaches sports aspirants pan India. It also conducts various
sports events and campaigns, across the country. In 2022, to mark the 25th year of its
operation, a cricket tournament (akin to the format of T-20) is being organized by Kite
Sports Academy in Lancashire, England, in the first half of April. The prize money for
the ‘winning team’ is fixed at USD 40,000 whereas in case of ‘runner-up’, it is pegged at
USD 11,000. You are required to choose the correct option from the four given below
which signifies the steps to be taken by Kite Sports Academy for remittance of the prize
money of USD 51,000 (i.e. USD 40,000+USD 11,000) to England keeping in view the
relevant provisions of Foreign Exchange Management Act, 1999:
a) For remittance of the prize money of USD 51,000, Kite Sports Academy is
required to obtain prior permission from the Ministry of Human Resource
Development (Department of Youth Affairs and Sports).
b) For remittance of the prize money of USD 51,000, Kite Sports Academy is
required to obtain prior permission from the Reserve Bank of India.
c) For remittance of the prize money of USD 51,000, Kite Sports Academy is not
required to obtain any prior permission from any authority, whatsoever, and it can
proceed to make the remittance.
d) For remittance of the prize money of USD 51,000, Kite Sports Academy is
required to obtain prior permission from the Ministry of Finance (Department of
Economic Affairs). (MT)

Answer: C

Page 8
HBL Private Limited is a project engineering, procurement and construction company.
The company has bagged a contract from the Government of State of Tamil Nadu for
construction of Water Dam. The company has involved a project consultancy firm
situated in Netherlands for preparing techno economic feasibility report to enable it to
start construction work of dam. The company had paid USD 7,000,000 to vendor of
Netherlands.
The company also availed the services of Software Company situated in UK for the
migration of its accounting software from SAP to Oracle for which the Company had
paid USD 2,000,000 to the software company.
Considering the provisions of Foreign Exchange Management Act, 1999, which of the
below mentioned statement is correct:
a) The company can make payment of USD 7,000,000 and USD 2,000,000 without
any approval.
b) The company can make payment of USD 7,000,000 without any approval and
USD 2,000,000 after obtaining prior approval of the Reserve Bank of India
(RBI).
c) The company can make payment of USD 7,000,000 and USD 2,000,000 after
obtaining prior approval of RBI.
d) The company can make payment of USD 7,000,000 after obtaining prior
approval of RBI and USD 2,000,000 without any approval. (MT)

Answer: B

Page 9
Mr. X had resided in India for less than 182 days during the financial year 2022-2023.
He arrived in India on April 1, 2023, to conduct business and intends to leave the
business on April 30, 2024, with plans to depart from India on June 30, 2024. What is Mr.
X's residential status for the financial year 2023-2024 under the FEMA, 1999? How many
days did Mr. X stay in India during the financial year 2023-2024? (RTP Sept’ 24)
a) Non-Resident, 182 days
b) Resident, 365 days
c) Resident but Not Ordinarily Resident (RNOR), 240 days
d) Resident, 91 days

Mr. Prakhar, an Indian Resident individual, wishes to obtain Foreign Exchange for a gift
remittance totaling US$ 50,000. Which of the following statements accurately reflects the
regulatory requirement under the Foreign Exchange Management Act, 1999 (FEMA)?
a) Mr. Prakhar can freely remit US$ 50,000 for the gift as it is a current account
transaction and the amount of gift remittance is less than US$ 2,50,000.
b) Mr. Prakhar must seek prior approval from the RBI for the remittance exceeding
US$ 50,000.
c) Mr. Prakhar must seek prior approval from the RBI for any gift remittance,
regardless of the amount.
d) Mr. Prakhar does not need to comply with any FEMA requirements as gift
remittance does not fall under the purview of the FEMA 1999. (MT)

Answer: B
Answer: A

Page 10
 Mr. L was employed as a fashion designer in Elegant Textile Ltd., a public limited
company in Gurugram, India during the financial year 2023-24. He had efficiently
provided his services for 183 days during the above said period. On 01.04.2024, Mr. H.
the Human Resource Manager of Jeff Fashion Ltd., Paris (a foreign country) offered him
a better employment opportunity in such company.
On 02.04.2024, Mr. L. left India for taking up employment as a production controller at
Jeff Fashion Ltd. in Paris. On 30.04.2024 he flew back to India for a 10 day family
function in Manali, India.
In light of the provisions of the Foreign Exchange Management Act, 1999, elucidate:
The residential status of Mr. L-
i. On his return for attending the family function on 30.04.2024.
ii. In case, instead of vacation, he joins an employment in an Indian company after
arriving on 30.04.2024. (May’ 24)

According to section 2(v) of the Foreign Exchange Management Act, 1999,

“Person resident in India” means a person residing in India for more than 182 days during the
course of the preceding financial year but does not include a person who has gone out of India
or who stays outside India,
a) for or on taking up employment outside India, or
b) for carrying on outside India a business or vocation outside India, or
c) for any other purpose, in such circumstances as would indicate his intention to stay
outside India for an uncertain period;

In the above case Mr. L was employed as a fashion designer in Elegant Textile Ltd., a public
limited company in Gurugram, India during the financial year 2023-24. He had efficiently
provided his services for 183 days during the above said period. On 01.04.2024, he left for
Paris. On 30.04.2024 he flew back to India for a 10 day family function in Manali, India.

Page 11
 i. In the given question, Mr. L will be treated as a person resident outside from 2.4.2024
till the time he works in Jeff Fashion Ltd. In Paris, as he has gone out of India for or on
taking up employment outside India.
His return to India for 10 days to attend a family function, will not alter his residential
status.
ii. Mr. L will be treated as a person resident in India from the day he joins employment in
India (after arriving on 30.4.2024).

Page 12
 Explain the meaning of term ‘currency’ as per the provisions of the Foreign Exchange
Management Act, 1999. (MT)

Currency
According to section 2(h) of the Foreign Exchange Management Act, 1999, ‘Currency’
includes all currency notes, postal notes, postal orders, money orders, cheques, drafts,
travelers’ cheques, letters of credit, bills of exchange and promissory notes, credit cards or
such other similar instruments, as may be notified by the Reserve Bank.

Page 13
 Explain the meaning of term ‘Foreign Exchange’ as per the provisions of the Foreign
Exchange Management Act, 1999. (MT)

According to section 2(n) of the Foreign Exchange Management Act, 1999,

‘foreign exchange’ means foreign currency and includes:
i. deposits, credits and balances payable in any foreign currency,
ii. drafts, travelers’ cheques, letters of credit or bills of exchange, expressed or drawn
in Indian currency but payable in any foreign currency,
iii. drafts, travelers’ cheques, letters of credit or bills of exchange drawn by banks,
institutions or persons outside India, but payable in Indian currency.

Page 14
 Mr. Rohan Sharma, an international cricket player has started its cricket academy,
namely, Rohan Sharma Cricket Academy, a private coaching club, which provides
coaching for cricket. The Academy has a cricket team which participates in cricket
matches all over India as well as outside India. Rohan Sharma Cricket Academy in a
collaboration with Melbourne Cricket Academy is organizing a cricket event in
Melbourne, Australia in the month of May 2024 and June 2024. Rohan Sharma
Academy is required to remit USD 200,000 to Melbourne Cricket academy as a part of
its share for organizing the cricket event in Melbourne. Advise whether it can get
Foreign Exchange and if so, under what conditions? (MT)

Section 5 of the Foreign Exchange Management Act, 1999 provides that any person
may sell or draw foreign exchange to or from an authorized person if such sale or drawal is a
current account transaction. The Central Government in consultation can, in public interest
and in consultation with Reserve Bank of India, impose reasonable restrictions for such
transactions.

Schedule II of the Foreign Exchange Management (Current Account Transactions) Rules,

2000 provides that no person shall draw foreign exchange for a transaction without approval
of the Central Government. One of the transaction included in Schedule II is remittance of
prize money/ sponsorship of sports activity abroad by a person other than International/
National/ State level sports bodies, if the amount involved exceeds USD 100,000.

Accordingly, Rohan Sharma Cricket Academy can withdraw foreign exchange of USD
100,000 as participation fee after obtaining permission from Ministry of Human Resource
Development (Department of Youth Affairs and Sports) as prescribed in Schedule II of
Foreign Exchange Management (Current Account Transactions) Rules, 2000.

Page 15
 Mr. Arjun, an Indian resident, had been working abroad for the past 10 years. During
his tenure abroad, he acquired foreign currency and held investments in foreign
securities. He also inherited a property located in New York from his late grandfather,
who was a non-resident Indian. After returning to India permanently, Mr. Arjun wishes
to understand the provisions under the Foreign Exchange Management Act, 1999
(FEMA) regarding the ownership and utilization of his foreign assets. (RTP Sept’ 24)

Under the provisions of the Foreign Exchange Management Act, 1999 (FEMA),
Mr. Arjun, being a resident in India, can hold, own, transfer, or invest in foreign currency,
foreign securities, or immovable property situated outside India under certain conditions.
These conditions are clarified by the RBI through A.P. (DIR Series) Circular No. 90 dated 9th
January, 2014, which elaborates on section 6(4) of the Act.

Clarifications under section 6(4) of FEMA:

1. Foreign Currency Accounts

 Mr. Arjun can maintain foreign currency accounts that were opened and
maintained by him when he was resident outside India.
2. Income and Investment
 Income earned through employment, business, or vocation outside India while
Mr. Arjun was a non-resident.
 Investments made abroad during his non-resident status.
 Gifts or inheritance received from a non-resident Indian.
3. Foreign Exchange and Income therefrom
 Foreign exchange holdings, including income arising from them, held outside
India by Mr. Arjun, acquired through inheritance from a non-resident Indian.

Page 16
 4. Utilization of Assets After Return to India
 Mr. Arjun may freely utilize all eligible assets abroad, including the income on
such assets or sale proceeds received after his return to India.
 He can make payments or fresh investments abroad without the approval of the
Reserve Bank of India, provided the funds used are from eligible assets held by
him abroad and the transaction complies with FEMA provisions.

Therefore, Mr. Arjun is eligible to hold and utilize his foreign assets as per the provisions
outlined in section 6(4) of FEMA and the RBI circular. These provisions allow him to
manage his foreign currency, securities, and inherited property located outside India in
compliance with the regulations governing residents' dealings in foreign assets under FEMA.

Page 17
 Explain the rules relating to the remittances made by persons other than individuals
requiring approval of RBI as provided in Schedule III to the Foreign Exchange
Management (Current Account Transactions) Rules, 2000 issued under the Foreign
Exchange Management Act, 1999 in respect of the following:
i. Commission to the agents abroad for sale of residential flats or commercial plots in
India.
ii. Remittances for consultancy services procured from outside India.
iii. Remittances by way of reimbursement of pre-incorporation expenses.(May’ 24)

The following remittances by persons other than individuals shall require prior
approval of the Reserve Bank of India as provided under FEMA, 1999 read with Schedule III
of the FEM (Current Account Transactions) Rules, 2000:

i. Commission, per transaction, to agents abroad for sale of residential flats or

commercial plots in India exceeding USD 25,000 or five percent of the inward
remittance whichever is more.
ii. Remittances exceeding USD 10,000,000 per project for any consultancy services in
respect of infrastructure projects and USD 1,000,000 per project, for other consultancy
services procured from outside India.
Explanation—For the purposes of this sub-paragraph, the expression “infrastructure’
shall mean as defined in explanation to para 1(iv)(A)(a) of Schedule I of FEMA
Notification 3/2000-RB, dated the May 3, 2000.
iii. Remittances exceeding five per cent of investment brought into India or USD 100,000
whichever is higher, by an entity in India by way of reimbursement of pre-
incorporation expenses.

Page 18
 Analyse the below mentioned situation in the light of the provisions of the Foreign
Exchange Management Act, 1999.
i. Mr. Vinod has won a big lottery and wants to remit US Dollar 20,000 out of his
winnings to his son who is in Singapore.
ii. Mr. Shyam requires US Dollar 5,000 for remittance towards hiring charges of
transponders.(MT)

According to section 5 of the Foreign Exchange Management Act, 1999, any

person may sell or draw foreign exchange to or from an authorized person if such a sale or
drawal is a current account transaction. Provided that Central Government may, in public
interest and in consultation with the reserve bank, impose such reasonable restrictions for
current account transactions as may be prescribed.

As per the rules, drawal of foreign exchange for current account transactions are categorized
under three headings-

1. Transactions for which drawal of foreign exchange is prohibited,

2. Transactions which need prior approval of appropriate government of India for drawal
of foreign exchange, and
3. Transactions which require RBI's prior approval for drawl of foreign exchange.

i. Mr. Vinod wanted to remit US Dollar 20,000 out of his lottery winnings to his son
residing in Singapore. Such remittance is prohibited and the same is included in the
Foreign Exchange Management (Current Account Transactions) Rules, 2000.
Hence Mr. Vinod cannot withdraw foreign exchange for this purpose.
ii. In the given situation, it is a current account transaction, where Mr. Shyam is
required to take approval of the Central Government for drawal of foreign
exchange for remittance of hire charges of transponders.

Page 19
 Mr. Pravesh, an Indian National desires to obtain Foreign Exchange for the following
purposes:
i. US$ 140,000 for studies abroad on the basis of estimates given by the foreign
university.
ii. U.S. $ 10,000 for remittance towards hiring charges of transponders.
Advise him whether he can get Foreign Exchange, as per the provisions of the Foreign
Exchange Management Act, 1999. (MT)

i. Remittance of Foreign Exchange for studies abroad: According to the provisions of the
Foreign Exchange Management Act, 1999, foreign exchange may be released for
studies abroad up to a limit of US $ 250,000 for the studies abroad without any
permission from the Reserve Bank of India (RBI). Above this limit, RBI’s prior
approval is required. Further, proviso to Para I of Schedule III states that individual
may be allowed remittances exceeding USD 250,000 based on the estimate received
from the institution abroad. In this case since US $ 140,000 is the drawal of foreign
exchange, so permission of the RBI is not required by Mr. Pravesh.
ii. Under section 5 of the Foreign Exchange Management Act, 1999, and Rules relating
thereto, some current account transactions require prior approval of the Central
Government, some others require the prior approval of the Reserve Bank of India,
some are freely permitted transactions and some others are prohibited transactions.
This is a current account transaction, where Pravesh is required to take approval of the
Central Government for drawal of foreign exchange for remittance of hire charges of
transponders.
In all the cases, where remittance of Foreign Exchange is allowed, either by general or
specific permission, the remitter has to obtain the Foreign Exchange from an
Authorised Person as defined in Section 2(c).

Page 20
 Ms. Prabha, a classical dancer of Bharatnatyam, wants to go to the USA for a
performance. In this connection she requires foreign exchange drawal of US$ 50,000.
Explain Ms. Prabha, the provision of the Foreign Exchange Management Act, 1999, in
respect of permission required for such drawal of foreign exchange. (MT)

According to the provisions of the Foreign Exchange Management Act, 1999 read
with respective Rules and Schedule, foreign exchange drawals for cultural tours require prior
permission/approval of the Ministry of Human Resources Development (Department of
Education and Culture) irrespective of the amount of foreign exchange required.

Therefore, in the given case, Ms. Prabha is required to seek permission of the said Ministry of
the Government of India.

Page 21
 University of Oxford is one of the leading institutes of UK. In the month of May 2024,
they are planning a cultural event in UK. The University has invited Ms. Kanika
Tripathi and her group, an Indian artist to perform in the event.
Ms. Kanika Tripathi needs to withdrawal foreign exchange of USD 75,000 for the
purpose of visit to UK for performing at cultural event of University of Oxford in UK.
Advise whether she can withdraw Foreign Exchange and if so, under what conditions?
(MT)

Section 5 of the Foreign Exchange Management Act, 1999 provides that any person
may sell or draw foreign exchange to or from an authorized person if such sale or drawal is a
current account transaction. The Central Government in consultation can, in public interest
and in consultation with Reserve Bank of India, impose reasonable restrictions for such
transactions.

Schedule II of the Foreign Exchange Management (Current Account Transactions) Rules,

2000 provides that no person shall draw foreign exchange for a transaction without approval
of the Central Government. One of the transaction included in Schedule II is ‘cultural tours’.

Accordingly, Ms. Kanika Tripathi can withdraw foreign exchange of USD 75,000 for meeting
expenses of cultural tour after obtaining permission from Ministry of Human Resource
Development (Department of Education and Culture) as prescribed in Schedule II of Foreign
Exchange Management (Current Account Transactions) Rules, 2000.

Page 22
 Mr. Shivesh, an Indian National desires to obtain Foreign Exchange for the following
purposes:
i. Remittance of US Dollar 50,000 out of winnings on a lottery ticket.
ii. US Dollar 100,000 for sending a cultural troupe on a tour of U.S.A.
Advise him whether he can get Foreign Exchange and if so, under what conditions?
(RTP May’ 24)/ (MT)

Under provisions of section 5 of the Foreign Exchange Management Act, 1999

certain Rules have been made for drawal of Foreign Exchange for Current Account
transactions. As per these Rules, Foreign Exchange for some of the Current Account
transactions is prohibited. As regards some other Current Account transactions, Foreign
Exchange can be drawn with prior permission of the Central Government while in case of
some Current Account transactions, prior permission of Reserve Bank of India is required.

i. Remittance out of lottery winnings is prohibited as the same is included in First

Schedule to the Foreign Exchange Management (Current Account Transactions) Rules,
2000. Hence, Mr. Shivesh cannot withdraw Foreign Exchange for this purpose.
ii. Foreign Exchange for meeting expenses of cultural tour can be withdrawn by any
person after obtaining permission from Government of India, Ministry of Human
Resources Development, (Department of Education and Culture) as prescribed in
Second Schedule to the Foreign Exchange Management (Current Account
Transactions) Rules, 2000. Hence, Mr. Shivesh can withdraw the Foreign Exchange
after obtaining such permission.
In all the cases, where remittance of Foreign Exchange is allowed, either by general or
specific permission, the remitter has to obtain the Foreign Exchange from an Authorised
Person as defined in Section 2(c).

Page 23