India Law Firm THE REMITTANCES OF FOREIGN EXCHANGE AND INVESTMENT IN FOREIGN

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Central Acts of India compiled by Law Firm in India

 THE REMITTANCES OF FOREIGN EXCHANGE AND INVESTMENT IN FOREIGN

 EXCHANGEBONDS (IMMUNITIES AND EXEMPTIONS) ACT, 1991

 NO. 41 OF 1991

 [18th September, 1991.]

 An  Act  to  provide  for  certain  immunities  to  persons  receiving

 remittances in  foregin exchange  and to  persons owning  the  Foreign

 Exchange Bonds  and  for  certain  exemptions  from  direct  taxes  in

 relation to  such remittances  and bonds  and  for  matters  connected

 therewith or incidental thereto.

      WHEREAS the  position relation  to balance of payments has become

 difficult and  it is  necessary to  attract large  inflow  of  foreign

 exchange;

      AND WHEREAS  With a  view to  attracting such  inflow of  foreign

 exchange, it  is expedient  to  provide  for  certain  immunities  and

 exemptions to  render it  possible for  certain persons to receive the

 said remittances in foreign exchange and to own the said Bonds;

      BE it  enacted by  Parliament in  the Forty-second  Year  of  the

 Republic of India as follows:--

 CHAP

 PRELIMINARY

                               CHAPTER I

                              PRELIMINARY

1.

 Short title and extent.

      1. Short  title and  extent. (1)  This  Act  may  be  called  the

 Remittances of  Foreign Exchange  and Investment  in Foreign  Exchange

 Bonds (Immunities and Exemptions) Act, 1991.

      (2) It extends to the whole of India.

 CHAP

 REMITTANCES OF FOREIGN EXCHANGE

                               CHAPTER II

                    REMITTANCES OF FOREIGN EXCHANGE

2.

 Definitions.

      2. Definitions.  In this  Chapter, unless  the context  otherwise

 requires,--

           (a) "recipient"  means a person as defined in clause (31) of

      section 2  of the Income-tax Act, 1961 (43 of 1961.) who receives

      any remittance under this Chapter;

           (b) "remittance"  means remittance  made in foreign exchange

      by any  person resident  outside India  to a  person resident  in

      India on or after the date of commencement of this Act but before

      the specified  date, in  the form  of draft, traveller's cheques,

      cheques  drawn   on  banks  situated  outside  India  telegraphic

      transfers, mail  transfers, money  orders or  by way  of transfer

      from  Non-resident  (External)  Account,  Foreign  Currency  Non-

      resident Account or Foreign Currency Non-resident Special Deposit

      Account maintained  in India  under  the  rules  made  under  the

      Foreign Exchange Regulation Act, 1973. (46 of 1973.)

           Explanation.-- For  the purposes  of this clause, "specified

      date" means  the 1st  day of  December, 1991  or such other later

      date as  the Central  Government  may,  by  notification  in  the

      Official Gazette, specify in this behalf;

           (c) all other words and expressions used in this Chapter but

      not defined  and defined  in the Foreign Exchange Regulation Act,

      1973 (46  of 1973.) shall have the meanings respectively assigned

      to them in that Act.

3.

 Immunities.

      3. Immunities.  (1) Notwithstanding  anything  contained  in  any

 other law for the time being in force,--

           (a) no  recipient, who claims immunity under this Chapter in

      accordance with  such scheme as the Reserve Bank of India may, by

      notification in the Official Gazette, specify for the purposes of

      receiving remittances  under this  Chapter, shall  be required to

      disclose, for  any purpose  whatsoever, the  nature and source of

      the remittance made to him;

           (b) no  inquiry or  investigation shall be commenced against

      the recipient  under any  such law  on the  ground  that  he  has

      received such remittance;

           (c) the  fact that  the recipient  has received a remittance

      shall not  be taken  into account  and shall  be inadmissible  as

      evidence in  any proceedings  relating  to  any  offence  or  the

      imposition of any penalty under any such law.

      (2) Nothing in sub-section (1) shall apply--

           (a) to  any foreign exchange which is required to be brought

      into India under any of the provisions of--

                (i) the  Foreign Exchange  Regulation Act, 1973; (46 of

           1973.) or

                (ii) the  Income-tax Act, 1961, (43 of 1961.) read with

           the Foreign  Exchange Regulation Act, 1973, (46 of 1973.) if

           the period  within which  such foreign  exchange  is  to  be

           brought into  India has not expired or where such period has

           been extended,  in any  manner, by the Central Government or

           the Reserve  Bank of  India or  any  other  authority,  such

           extended period  has not expired on the date of commencement

           of this Act;

           (b) in  relation to  prosecution for  any offence punishable

      under Chapter IX or Chapter XVII of the Indian Penal Code, (45 of

      1860.) the  Narcotic Drugs and Psychotropic Substances Act, 1985,

      (61  of   1985.)  the   Terrorist   and   Disruptive   Activities

      (Prevention)  Act,   1987,  (28   of  1987.)  the  Prevention  of

      Corruption Act,  1988  (49  of  1988.)  or  for  the  purpose  of

      enforcement of any civil liability.

      (3) The  Central Government shall cause the scheme notified under

 clause (a)  of sub-section  (1) to be laid, as soon as may be after it

 is notified, before each House of Parliament.

4.

 Remittances not to be taken into account in certain cases.

      4. Remittances  not to  be taken  into account  in certain cases.

 Without prejudice to the generality of the provisions of section 3,--

           (a) any  remittance received under this Chapter shall not be

      taken into  account for  the purpose  of any proceeding under the

      Income-tax Act,  1961 (43  of  1961.)  and,  in  particular,  the

      recipient shall not be entitled to claim any set-off or relief in

      any  assessment,   re-assessment,  appeal,   reference  or  other

      proceeding under  that Act  or to  re-open any  assessment or re-

      assesment made  under that Act on the ground that he has received

      such remittance.

           Explanation.--For the  avoidance  of  doubt,  it  is  hereby

      declared that  the provisions  of the Income-tax Act, 1961 (43 of

      1961.) will  apply to  any income  which accrues  or arises or is

      deemed to accrue or arise to the recipient from the amount of the

      remittance;

           (b) any  remittance received  under this  Chapter shall  not

      form part  of the  assets of  any assessee  for the  purposes  of

      computing his  net wealth  under the  Wealth-tax Act, 1957 (27 of

      1957.) in  relation to  any assessment year commencing before the

      1st day of April, 1992.

 CHAP

 INVESTMENT IN FOREIGN EXCHANGE BONDS

                              CHAPTER III

                  INVESTMENT IN FOREIGN EXCHANGE BONDS

5.

 Definitions.

      5. Definitions. (1) In this Chapter, unless the context otherwise

 requires,--

           (a) "Foreign  Exchange Bonds" means the Bonds, issued by the

      State Bank  of India  constituted under  the State  Bank of India

      Act, 1955  (28 of  1955.) in  accordance with  such scheme as the

      Reserve Bank  of India  may,  by  notification  in  the  Official

      Gazette, specify  in this  behalf, the investment wherein is made

      on or  after the  date of commencement of this Act but before the

      specified date.

           Explanation.-- For  the purposes of this clause, " specified

      date" means  the 1st  day of  December, 1991  or such other later

      date as  the Central  Government  may,  by  notification  in  the

      Official Gazette, specify in this behalf;

           (b) "non-resident  Indian"  means  an  individual,  being  a

      citizen of  India or  a person  of Indian  origin who is resident

      outside India.

           Explanation 1.--  A person  shall be  deemed to be of Indian

      origin if--

                (i) he,  or either  of his parents or any of his grand-

           parents,  was   a  citizen   of  India   by  virtue  of  the

           Constitution or the Citizenship Act, 1955; (57 of 1955.) or

                (ii) he at any time held an Indian passport:

           Provided that  the nationals of Pakistan or Bangladesh shall

      not be deemed to be of Indian origin.

           Explanation 2.--  A spouse (not being a national of Pakistan

      or Bangladesh)  of a person of Indian origin shall also be deemed

      to be of Indian origin;

           (c)  "overseas   corporate  body"   means  any  institution,

      association or  body, whether  incorporated or  not,  established

      under the  laws of  a country  outside  India  wherein  any  non-

      resident Indian has any interest;

           (d) all other words and expressions used in this Chapter but

      not defined  and defined  in the Foreign Exchange Regulation Act,

      1973, (46 of 1973.) shall have the meanings respectively assigned

      to them in that Act.

      (2) The  Central Government shall cause the scheme notified under

 clause (a)  of sub-section  (1) to be laid, as soon as may be after it

 is notified, before each House of Parliament.

6.

 Immunities.

      6. Immunities.  (1) Notwithstanding  anything  contained  in  the

 Wealth-tax Act,  1957, (27  of 1957.)  the Gift-tax  Act, 1958, (18 of

 1958.) the  Income-tax Act,  1961, (43  of 1961.) the Foreign Exchange

 Regulation Act,  1973 (46  of  1973.)  and  the  Foreign  Contribution

 (Regulation) Act, 1976,-- (46 of 1976.)

           (a) no non-resident Indian or overseas corporate body who or

      which owns  the Foreign  Exchange Bonds or any person resident in

      India to  whom a  gift of  such  Bonds  has  been  made  by  such

      nonresident Indian  or overseas corporate body, shall be required

      to disclose, for any purpose whatsoever, the nature and source of

      the investment in such Bonds;

           (b) no  inquiry or  investigation shall be commenced against

      any of  the persons  referred to  in clause  (a) under any of the

      said Acts on the ground that such person owns such Bonds;

           (c) the  fact that  any of the persons referred to in clause

      (a) owns  such Bonds shall not be taken into account and shall be

      inadmissible as  evidence in  any  proceedings  relating  to  any

      offence or  the imposition  of any  penalty under any of the said

      Acts.

      (2) Nothing  in sub-section  (1) shall  apply to foreign exchange

 which is required to be brought into India under any of the provisions

 of--

           (i) the Foreign Exchange Regulation Act, 1973; (46 of 1973.)

or

           (ii) the  Income-tax Act,  1961, (43 of 1961.) read with the

      Foreign Exchange  Regulation Act,  1973, (46  of  1973.)  if  the

      period within  which such  foreign exchange is to be brought into

      India has  not expired or where such period has been extended, in

      any manner,  by the  Central Government  or the  Reserve Bank  of

      India or  any other  authority,  such  extended  period  has  not

      expired on the date of commencement of this Act.

7.

 Foreign Exchange Bonds not to be taken into account in certain cases.

      7. Foreign Exchange Bonds not to be taken into account in certain

 cases. Without  prejudice to  the  generality  of  the  provisions  of

 section 6,--

           (a) the provisions of the Income-tax Act, 1961 (43 of 1961.)

      shall not  apply to  any interest  accruing in  relation  to  the

      Foreign Exchange Bonds;

           (b) the provisions of the Wealth-tax Act, 1957 (27 of 1957.)

      shall not apply in relation to the Foreign Exchange Bonds;

           (c) the  provisions of  the Gift-tax Act, 1958 (18 of 1958.)

      shall not  apply where any non-resident Indian becomes a resident

      in India and makes a gift of the Foreign Exchange Bonds.

                                                      V. S. RAMA DEVI,

                                           Secy. to the Govt. of India.

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