In September, 2024, Pawan visited Atlanta as well as Athens and thereafter, London and Berlin on a month-long business trip, for which he withdrew…
CA Intermediate · Corporate and Other Laws · MTP · September 2025
In September, 2024, Pawan visited Atlanta as well as Athens and thereafter, London and Berlin on a month-long business trip, for which he withdrew foreign exchange to the extent of US$ 50,000 from his banker State Bank of India, New Delhi branch. In December, 2024 he further, withdrew US$ 50,000 from SBI and remitted the same to his son Aryan who was studying in Toronto, Canada. In the first week of January, 2025, he sent his ailing mother Mrs. Savita for a specialised treatment along with his wife Mrs. Rashmi to Seattle where his younger brother Pranav, holder of Green Card, is residing. For the purpose of his mother's treatment and to help Pranav to meet increased expenses, he requested his banker SBI to remit US$ 75,000 to Pranav account maintained with Citibank, Seattle. In February, 2025, Pawan's daughter Devanshi got engaged and she opted for a 'destination marriage' to be held in August, 2025 in Zurich, Switzerland. While on a trip to Dubai in the last week of March, 2025, he again withdrew US$ 35,000 to be used by him and Devanshi for meeting various trip expenses including shopping in Dubai. Later, the event manager gave an estimate of US$ 2,50,000 for the wedding of Devanshi at Zurich, Switzerland. Which option do you think is the correct one in the light of applicable provisions of Foreign Exchange Management Act, 1999 including obtaining of prior approval, if any, from Reserve Bank of India since Pawan withdrew foreign exchange on various occasions from his banker State Bank of India.
Suggested Answer and Working Notes:
Correct Answer: Option (A)
In respect of withdrawal of foreign exchange on various occasions from his banker State Bank of India and remitting the same outside India during the financial year 2024-25, Pawan is not required to obtain any prior approval.
Topics: The Foreign Exchange Management Act, 1999
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