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CS Executive · Economic, Commercial and Intellectual Property Laws · Foreign Direct Investments - Regulations and Policy

Under section 6(4) of FEMA, which of the following may a person resident in India hold or invest in outside India without breaching the section?

A resident in India may hold foreign currency that he acquired while resident outside India. Section 6(4) protects foreign currency, security or property acquired or owned during non-residence, or inherited from a person resident outside India, but not assets acquired later as a resident.

  1. AForeign security bought abroad after returning to India using undeclared funds
  2. BForeign currency acquired when he was resident outside IndiaCorrect
  3. CImmovable property abroad bought after becoming resident, from Indian funds
  4. DForeign currency obtained from an unauthorised dealer

Explanation

Section 6(4) permits a resident in India to hold, own, transfer or invest in foreign currency, security or immovable property abroad if it was acquired, held or owned when he was resident outside India, or inherited from a person resident outside India. The other options involve acquisition while resident.

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