Visiting Abroad for Holidays? Know the Regulations to Get Your Holiday Cash

Before you buy foreign exchange from any bank or authorized money exchanger for your travel abroad, you should know the regulations associated with it. Foreign Exchange market in India is regulated by the Foreign Exchange Management Act (1999) or in short FEMA. It was introduced as a replacement for earlier Foreign Exchange Regulation Act (FERA).

For travel purposes, you can purchase foreign exchange from any Authorised Dealer (AD) Category-I bank and AD Category II. Full-Fledged Money Changers (FFMCs) are also permitted to release exchange for business and private visits.

According to FEMA, persons resident in India are free to buy or sell foreign exchange for any current account transaction.

Who is a resident as per Foreign Exchange Management Act?

i. A person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include –

(A) A person who has gone out of India or who stays outside India, in either case -

a. for or on taking up employment outside India, or
b. for carrying on outside India a business or vocation outside India, or
c. for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;

(B) A person who has come to or stays in India, in either case, otherwise than –
a. for or on taking up employment in India, or
b. for carrying on in India a business or vocation in India, or
c. for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;

i. any person or body corporate registered or incorporated in India,
ii. an office, branch or agency in India owned or controlled by a person resident outside India,
iii. an office, branch or agency outside India owned or controlled by a person resident in India;

How much foreign exchange can one buy when going for a holiday abroad?

For private visits abroad, other than to Nepal and Bhutan, any resident can obtain foreign exchange up to an aggregate amount of USD 10,000, from an Authorised Dealer, in any one financial year, irrespective of the number of visits undertaken during the year. Travellers are allowed to purchase foreign currency notes / coins only up to USD 3000. You can buy foreign exchange 60 days in advance.

Can one pay by cash full rupee equivalent of foreign exchange being purchased for travel abroad?

Foreign exchange for travel abroad can be purchased against rupee payment in cash only up to Rs. 50,000. However, if the Rupee equivalent exceeds Rs. 50,000, the entire payment should be made by way of a crossed cheque/ banker’s cheque/ pay order/ demand draft/ debit card / credit card / prepaid card/ NEFT/RTGS transfer only.

Is there any time-frame for a traveller who has returned to India to surrender foreign exchange?

On return from a foreign trip, travellers are required to surrender unspent foreign exchange held in the form of currency notes and travellers cheques within 180 days of return. However, they are free to retain foreign exchange up to USD 2,000, in the form of foreign currency notes or TCs for future use or credit to their Resident Foreign Currency (Domestic) [RFC (Domestic)] Accounts.

There are many money exchangers in Delhi NCR. Before buying or selling foreign exchange, you should make sure that the money changer is an authorized dealer. You can book your forex from sites like www.bookmyforex.com which is an authorized Full-Fledged Money Changer. This site doesn’t allow you to do any sort of transaction that is not as per Foreign Exchange Management Act (FEMA).
The author is associated with bookmyforex which is a leading provider of financial services to both individuals and businesses alike. For more information about money changer and money exchanger visit https://www.bookmyforex.com/