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Under FEMA, 'foreign exchange' includes all EXCEPT:
AIndian currency notes
BDrafts, travellers' cheques drawn outside India payable in INR
CDeposits, credits and balances payable in any foreign currency
DBills of exchange in foreign currency
Answer & Solution
Correct answer: A. Indian currency notes
1. Section 2(n) — 'foreign exchange' includes foreign-currency instruments and certain drafts payable in INR drawn outside India.
2. Indian rupee currency notes are simply 'Indian currency' (Section 2(q)), NOT foreign exchange.
3. Hence (C).
_Source: ICAI BoS CA Inter Paper 2 — FEMA 1999_