CIR. NO. 17/2003-04-RB, DT. 20/09/2003

Remittance of Salary - Relaxation

Attention of Authorised Dealers is invited to Regulation No.7(8) of the Notification No.FEMA 10/2000-RB dated May 3, 2000 as amended by the Notification No.FEMA 34/2001-RB dated January 22, 2001, in terms of which foreign nationals employed in India are permitted to receive upto 75 per cent of their salary by credit to their accounts outside India.

2. On a review of the matter, it has been decided to extend the existing facility of remittance of salary available to foreign nationals to Indian nationals employed by a foreign company outside India on deputation to India. Reserve Bank has now issued a Notification No.FEMA 89/2003-RB dated April 29, 2003 (copy enclosed). Accordingly, it will be in order for a national of a foreign state, resident in India being an employee of a foreign company or a citizen of India employed by a foreign company outside India and in either cases on deputation to the office/branch/subsidiary/joint venture in India of such foreign company, to open, hold and maintain a foreign currency account with a bank outside India and receive the salary payable to him for services rendered to the office/branch/subsidiary/joint venture in India of such foreign company, by credit to such account subject to the following conditions :

i. the amount to be credited to such account shall not exceed 75 per cent of the salary accrued to or received by such person from the foreign company;

ii. the remaining salary shall be paid in Rupees in India; and

iii. subject to applicable taxes on the entire salary as accrued in India.

4. Authorised Dealers may bring the contents of this circular to the notice of their constituents concerned.

5. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the FEMA 1999 (42 of 1999).

Yours faithfully,

Grace Koshie
Chief General Manager

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Reserve Bank Of India
(Exchange Control Department)
Central Office Mumbai 400 001

Notification No.FEMA.89/2003-RB

dated April 29, 2003

Foreign Exchange Management (Foreign Currency Account by
a Person Resident in India)(Second Amendment) Regulations, 2003

In exercise of the powers conferred by clause (b) of Section 9 and clause (e) of sub-section (2) of Section 47 and in partial modification of its Notification No.FEMA 10/2000-RB dated 3rd May 2000 the Reserve Bank of India makes the following amendments in the Foreign Exchange Management (Foreign Currency Account by a Person Resident in India) Regulations 2000 namely:

1. Short title and commencement

(a) These Regulations may be called the Foreign Exchange Management (Foreign Currency Account by a Person Resident in India) (Second Amendment) Regulations, 2003.

(b) They shall come into force from the date of their publication in the Official Gazette.

2. Amendment of the Regulation

In the Foreign Exchange Management (Foreign Currency Account by a Person Resident in India) Regulations 2000, in sub-regulation 8 of Regulation 7, for the words "A national of a foreign State resident in India being an employee of a foreign company on deputation", the words "A national of a foreign State resident in India being an employee of a foreign company or a citizen of India employed by a foreign company outside India and in either case on deputation" shall be substituted.

Sd/-
( K.J. Udeshi )
Executive Director

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