Mr. Prakhar, an Indian Resident individual, wishes to obtain Foreign Exchange for a gift remittance totaling US$ 50,000. Which of the following…

CA Intermediate · Corporate and Other Laws · MTP · May 2024
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.

Suggested Answer and Working Notes:

Correct Answer: Option (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.

Topics: The Foreign Exchange Management Act, 1999

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