Rahul, a resident of India and an avid horse-racing enthusiast, earns 5 lakh as prize money from an international horse-racing event held in Dubai.…

CA Intermediate · Corporate and Other Laws · MTP · January 2025
Rahul, a resident of India and an avid horse-racing enthusiast, earns 5 lakh as prize money from an international horse-racing event held in Dubai. He wants to remit this amount to his personal foreign bank account for future international race entries and training. He consults his banker to confirm if this transaction is permissible under the Foreign Exchange Management Act (FEMA), 1999. Can Rahul remit his income from the international horse-racing event to his foreign bank account under FEMA, 1999?
(A) Yes, as it is his earned income.
(B) No, as remittance of income from racing, riding, or any other hobby is prohibited.
(C) Yes, but only with prior approval from the Reserve Bank of India (RBI).
(D) No, unless it is for charitable purposes.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

No, as remittance of income from racing, riding, or any other hobby is prohibited.

Topics: The Foreign Exchange Management Act, 1999

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