RBI notifies relaxation in remittance norms

The Reserve Bank of India has notified relaxation
in remittance norms regarding salary earned by foreign nationals employed in
India by a foreign company or an Indian citizen employed by a foreign company
outside India. These individuals, according to the RBI, may open, hold and
maintain a foreign currency account with a bank outside India and receive the
whole salary payable to him for the services rendered to the
office/branch/subsidiary/joint venture in India of such foreign company, by
credit to such account, provided that income-tax chargeable under the Income-tax
Act, 1961, is paid on the entire salary as accrued in India. Hitherto, the
amount that could be credited to the foreign currency account with a bank
outside India could not exceed 75 per cent of the salary accrued to or received
by the expatriate or Indian national from the foreign company. Further, the RBI
said that a citizen of a foreign State resident in India employed with a company
incorporated in India may open, hold and maintain a foreign currency account
with a bank outside India and remit the whole salary received in India in Indian
rupees, to such account, for the services rendered to the Indian company,
provided that income-tax chargeable under the Income-tax Act, 1961 is paid on
the entire salary accrued in India. The relaxation in the remittance norm by the
RBI follows the Government notifying the same through a Gazette notification.