Opening Special Non-Resident Rupee Account-RBI expands permitted uses of SNRR Account

Opening of Special Non-Resident Rupee Account-RBI expands the permitted uses of the SNRR Account

Opening of Special Non-Resident Rupee Account

Opening, holding and maintaining foreign currency accounts by a person resident in India is regulated in terms of section 9 of the Foreign Exchange Management Act, 1999 (FEMA). 

Under the current Regulations, any person resident outside India, having a business interest in India, may open a Special Non-Resident Rupee Account (SNRR account) with an authorised dealer for the purpose of putting through bona fide transactions in rupees.

The RBI, with a view to promote the usage of INR products by persons resident outside India, has decided to expand the scope of SNRR Account by permitting person resident outside India to open such account for following purposes:

(i) External Commercial Borrowings in INR;

(ii) Trade Credits in INR;

(iii) Trade (Export/ Import) Invoicing in INR; and

(iv) Business related transactions outside International Financial Service Centre (IFSC) by IFSC units at GIFT city like administrative expenses in INR outside IFSC, INR amount from sale of scrap, government incentives in INR, etc. The account will be maintained with bank in India (outside IFSC).

Certain other provisions for operation of the SNRR Account have also been rationalised:

(a) Remove the restriction on the tenure of the SNRR account opened for the purposes given at paragraph 3 above as the proposed transactions are more enduring in nature.

(b) Apart from Non-Resident Ordinary (NRO) Account, permit credit of amount due/ payable to non-resident nominee from account of a deceased account holder to Non-Resident External (NRE) Account or direct remittance outside India through normal banking channels.

However, as per the Notification issued in this regard, the required permissions / approvals shall remain unchanged.

• Object of assessment proceedings is not to find empirically correct solution on every fact issue – HC
• Penalty u/s 270A deleted as assessee filed revised computation during scrutiny
• Penalty u/s 271B for unfilled column 40 in Tax Audit Report Form 3CD deleted by ITAT
• Merely ex-parte rectifying computation without amending assessment order not make it nullity- ITAT
• Once assessee discharges primary onus, it shifts to AO to bring evidence to contrary – ITAT