Question

    An Indian insurer receives ₹5 crore as foreign premium

    from a US-based NRI. As per FEMA guidelines, how should the transaction be treated in its books and reporting?
    A Record as capital receipt Correct Answer Incorrect Answer
    B Report as current account inflow under FEMA and notify RBI Correct Answer Incorrect Answer
    C Ignore unless exceeding $1 million Correct Answer Incorrect Answer
    D Show under revaluation reserve Correct Answer Incorrect Answer
    E No compliance needed Correct Answer Incorrect Answer

    Solution

    Foreign remittances must be reported under FEMA via authorised dealers.

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