Section 4 — Holding of Foreign Assets

# Section 4 — Holding Foreign Currency, Foreign Security and Foreign Immovable Property

Section 4 closes the loop opened by Section 3. Sec. 3 governs the act of dealing; Sec. 4 governs the holding of foreign currency, foreign security and immovable property situated outside India.

> Default rule: a PRI cannot acquire, hold, own, possess or transfer any foreign exchange, foreign security or immovable property outside India.

The Act then carves out exceptions for each category.

## A. Immovable Property Outside India — Permitted Cases

A PRI may hold immovable property abroad if it was:

1. Acquired while the person was a PROI (e.g. flat bought in London while working there)

2. Acquired by way of gift or inheritance from a person referred to in (1)

3. Acquired out of an RFC (Resident Foreign Currency) Account

4. Held on lease not exceeding 5 years

## B. Foreign Security — Permitted Cases

A PRI may hold foreign security if it was:

1. Acquired while the person was a PROI

2. Acquired by way of gift or inheritance from a person referred to in (1)

3. Acquired out of an RFC Account

## C. Foreign Currency — Permitted Cases

A PRI may hold foreign currency if it was:

1. Acquired on or before 8 July 1947 (pre-FERA legacy)

2. Held by/through an Authorised Person

3. Held in an RFC or EEFC account

4. Held as a hobby (numismatic collection)

5. Up to US $2,000 received from:

• Service rendered outside India
• Gift or inheritance
• Honorarium
• Unspent foreign travel

## Key accounts referenced

## Visualising the structure