FEMA

Spending on International Credit Card on foreign trip expenses brought under FEMA Rules

Spending on International Credit Card on foreign trip expenses brought under FEMA Rules

As per Rule 5 of the the Foreign Exchange Management (Current Account Transactions) Rules, 2000 read with Schedule III, Individuals can avail of foreign exchange facility for specified purposes (i.e. foreign travel/tour, studies abroad, medical treatment etc. ) within the limit of USD 2,50,000. Any additional remittance in excess of the said limit for the following purposes shall require prior approval of the Reserve Bank of India.

However, Rule 7 provided exception to the above by providing that the Rule 5 shall not apply to the use of International Credit Card for making payment by a person towards meeting expenses while such person is on a visit outside India.

The Ministry of Finance has issued a Notification No. GSR 369(E) dated 16th May 2023 omitting the Rule 7. This by implication means that the prescribed limit of USD 2,50,000 shall also apply to the use of international credit card for meeting expenses while on a foreign visit.

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