Section 6 (4) of FEMA, 1999 permits a person resident in India to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India.
This circular clarifies that the following transactions are covered u/s. 6(4) of FEMA, 1999: –
(i) Foreign currency accounts opened and maintained by such a person when he was resident outside India.
(ii) Income earned through employment or business or vocation outside India taken up or commenced while such person was resident outside India, or from investments made while such person was resident outside India, or from gift or inheritance received while such a person was resident outside India.
(iii) Foreign exchange including any income arising therefrom, and conversion or replacement or accrual to the same, held outside India by a person resident in India acquired by way of inheritance from a person resident outside India.
(iv) Persons resident in India can freely utilise all their eligible assets abroad as well as income on such assets or sale proceeds thereof received after their return to India for making any payments or to make any fresh investments abroad without RBI approval if the cost of such investments and/or any subsequent payments are met exclusively out of funds forming part of eligible assets held by them and the transaction is not in contravention of the provisions of FEMA.