Foreign Exchange for Study Abroad

By | August 14, 2015

Foreign Exchange for Study Abroad

Study abroad upto estimate from the institution abroad or US $ 1,00,000 whichever is higher, per academic year is permitted. Exchange upto USD 1,00,000 can be released on self-declaration basis, on submission of application in form A2, without any supporting documents. Estimate is required if exchange requirement is higher than USD 1,00,000 – RBI circular No. 3 dated 17-7-2003 [Item 10 of Schedule III of Foreign Exchange Management (Current Account Transactions) Rules, 2000].

It is clarified that the student is entitled to get upto USD 100,000 from close relatives on self-declaration basis for maintenance and studies and upto USD 1 million from their account with Authorised Dealer or out of sale proceeds. He is also entitled to all facilities available to NRI and can also avail educational loans – RBI circular No. 45 dated 8-12-2003 – RBI AP (DIR) Circular No. 45 dated 8-12-2003 – para 8 of RBI Master Circular No. 8/2014-15 dated 1-7-2014 on ‘Remittance Facilities to NRI/PIO/FN’ [earlier RBI Master Circular No. 8/2013-14 dated 1-7-2013].

No restriction if payment through RFC/EEFC account – Restrictions on foreign exchange for study abroad do not apply if payment is through RFC/EEFC account. [See rules 5 and 6 of Foreign Exchange Management (Current Account Transactions) Rules, 2000].

1.6-1 Residential status of student

Generally, a student goes out of India for a ‘certain period’. Thus, if a student who resided in India during the financial year 2003-04 leaves on 15-7-2004 for higher studies abroad for two years, he will be ‘resident’ for 2004-05, as he has gone to stay outside India for a ‘certain period’. However, if he goes abroad with intention to stay outside India for an ‘uncertain period’, he will not be ‘resident’ w.e.f. 15-7-2004. – – In either case, he will not be resident during 2005-06, as he did not stay in India for 182 days during 2004-05. – – RBI has recognised that though a student goes abroad for ‘certain period’ at the time of leaving, practically, his stay gets extended for various reasons like taking advanced course, taking job or seeking scholarship to supplement income to meet financial requirements. As he has to earn and learn, his stay gets prolonged. Hence, it will be treated that he has gone out of India for ‘uncertain period’ and he will be treated as Non-Resident Indian – RBI circular No. 45 dated 8-12-2003.

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