(1) Subject to the provisions of sub-section (2), any person may sell or draw foreign exchange to or from an authorised person for a capital account transaction.

(2) The Reserve Bank may, in consultation with the Central Government, specify--

1[(a) any class or classes of capital account transactions, involving debt instruments, which are permissible;]

(b) the limit up to which foreign exchange shall be admissible for such transactions:

2[(c) any conditions which may be placed on such transactions;]

3[Provided that the Reserve Bank or the Central Government shall not impose any restrictions on the drawal of foreign exchange for payment due on account of amortisation of loans or for depreciation of direct investments in the ordinary course of business.]

4[(2A) The Central Government may, in consultation with the Reserve Bank, prescribe--

(a) any class or classes of capital account transactions, not involving debt instruments, which are permissible;

(b) the limit up to which foreign exchange shall be admissible for such transactions; and

(c) any conditions which may be placed on such transactions.]

5 * * * *

(4) A person resident in India may 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.

(5) A person resident outside India may hold, own, transfer or invest in Indian currency, security or any immovable property situated in India if such currency, security or property was acquired, held or owned by such person when he was resident in India or inherited from a person who was resident in India.

(6) Without prejudice to the provisions of this section, the Reserve Bank may, by regulation, prohibit, restrict, or regulate establishment in India of a branch, office or other place of business by a person resident outside India, for carrying on any activity relating to such branch, office or other place of business.

6[(7) For the purposes of this section, the term “debt instruments” shall mean, such instruments as may be determined by the Central Government in consultation with the Reserve Bank.]

---------------------------------------------------------------------------------------------

Footnote :

1. Subs. by Act 20 of 2015, s. 139, for Clause (a) (w.e.f. 15-10-2019).

2. Ins. by s. 139, ibid. (w.e.f. 15-10-2019).

3. The Proviso subs. by s. 139, ibid. (w.e.f. 15-10-2019).

4. Ins. by Act 20 of 2015, s. 139 (w.e.f. 15-10-2019).

5. Sub-section (3) omitted by s. 139,ibid. (w.e.f. 15-10-2019).

6. Ins. by s. 139, ibid. (w.e.f. 15-10-2019).