Question: I am in a difficult position and need your help. My son is suffering from a rare bone disease and we have been struggling to meet the expenses for his treatment. He needs a surgery and long-term rehabilitation. We had approached a charity in India and they crowd-sourced some money for my son. Will it be legal for me to accept that money while I am residing in the UAE? Can that money be wired to the UAE from India? What are the legal restrictions involved?
Pursuant to your queries, it may be noted that the Foreign Exchange Management Act of 1999 (FEMA); Foreign Exchange Management (Remittance of Assets) Regulations of 2016 read with Notification No. FEMA 13 (R)/2016-RB issued on 1 April 2016 (the Notification), and Master Direction 13/ 2015-16 - Remittance of Assets updated on 28 April 2016 (the Master Direction), shall be applicable.
In response to your queries, it may be noted that as an NRI, you may remit from India up to $1 million in a financial year. This is in accordance with Regulation 4 (2) of the Notification and Regulation 3.2 of the Master Direction.
Regulation 4 (2) of the Notification reads as follows:
“4. Permission for remittance of assets in certain cases:-
(2) A Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) may remit through an authorised dealer an amount, not exceeding USD 1,000,000 (US Dollar One million only) per financial year.
"Provided further that where the remittance is to be made from the balances held in the NRO account, the account holder shall furnish an undertaking to the Authorised Dealer that the said remittance is sought to be made out of the remitter’s balances held in the account arising from his/ her legitimate receivables in India and not by borrowing from any other person or a transfer from any other NRO account and if such is found to be the case, the account holder will render himself/ herself liable for penal action under FEMA.”
In furtherance to the above, Regulation 3.2 of the Master Direction, reads as follows:
“3.2 Remittances by NRIs/ PIOs
ADs may allow NRIs/ PIOs, on submission of documentary evidence, to remit up to USD one million, per financial year:
Where the remittance is to be made from the balances held in the NRO account, the Authorised Dealer should obtain an undertaking from the account holder stating that “the said remittance is sought to be made out of the remitter’s balances held in the account arising from his/ her legitimate receivables in India and not by borrowing from any other person or a transfer from any other NRO account and if such is found to be the case, the account holder will render himself/ herself liable for penal action under FEMA.”
On the basis of the aforementioned undertaking, considering that the transfer to be made is from donations received from a charity in India and not from balances arising from your legitimate receivables in India, the transfer may not be legal under the Notification and the Master Direction, and consequently may not be facilitated by the Authorised Dealer.
In view of the foregoing, while the transfer may not be permitted under the Notification and the Master Direction, the permission of the Reserve Bank of India (the RBI) may be sought, to consider the special circumstances of your case wherein, should the transfer not take place, it would cause immense hardships to your son.
This is in accordance with Regulation 7 (1) (ii) of the Notification and Regulation 4.1 (b) of the Master Direction. Regulation 7 (1) (ii) of the Notification, reads as follows:
“7. Reserve Bank's prior permission in certain cases:-
(1) A person who desires to make a remittance of assets in the following cases, may apply to the Reserve Bank, namely:
(ii) Remittance to a person resident outside India on the ground that hardship will be caused to such a person if remittance from India is not made."
In furtherance to the above, Regulation 4.1 (b) of the Master Direction, reads as follows:
“4. Remittance of assets requiring RBI approval
4.1 Prior approval of the Reserve Bank is necessary for remittance of assets where:
(b) Hardship will be caused to a person if remittance from India is not made to such a person.”
You may approach the RBI in India and/or consult a chartered accountant or a legal practitioner, to gain further clarifications in relation to your queries.
Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: email@example.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.
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