5 fema act 1999
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The document summarizes the key aspects of the Foreign Exchange Management Act (FEMA) of 1999 in India. It provides definitions of important terms like authorized person, capital account transaction, current account transaction, and foreign exchange. It outlines the chapters of FEMA, including regulation of foreign exchange, authorized persons, contraventions and penalties, adjudication and appeal procedures. The objective of FEMA is to facilitate external trade and payments in foreign exchange in India.
5 fema act 1999
- 1. The Foreign Exchange Regulation Act, 1973 (FERA) was repealed and a new Act called the Foreign Exchange Management Act, 1999 (FEMA) came into force with effect from June 1, 2000. The objective of the new dispensation is to facilitate external trade and payments and promote orderly development and smooth conduct of foreign exchange market in India Foreign Exchange Management Act, 1999 (FEMA)
- 2. CHAPTER 1 PRELIMINARY (Short title, extent, application and commencement) CHAPTER 2 REGULATION AND MANAGEMENT OF FOREIGN EXCHANGE CHAPTER III- AUTHORISED PERSON CHAPTER IV-CONTRAVENTION AND PENALTIES CHAPTER V- ADJUDICATION AND APPEAL CHAPTER VI-DIRECTORATE OF ENFORCMENT CHAPTER VII-MISCELLANEOUS
- 3. CHAPTER 1 PRELIMINARY (Short title, extent, application and commencement) "authorized person" means an authorized dealer, money changer, off-shore banking unit or any other person for the time being authorized under subsection (1) of section 10 to deal in foreign exchange or foreign securities; "capital account transaction" means a transaction which alters the assets or liabilities, including contingent liabilities, outside India of persons resident in India or assets or liabilities in India of persons resident outside India, and transactions referred to in sub-section (3) of section 6;
- 4. capital account transaction In India of persons resident outside India Outside India of persons resident in India ASSETS/LIABILITIES
- 5. "current account transaction" means a transaction other than a capital account transaction and without prejudice to the generality of the foregoing such transaction includes,- payments due in connection with foreign trade, other current business, services, and short-term banking and credit facilities in the ordinary course of business, payments due as interest on loans and as net income from investments, remittances for living expenses of parents, spouse and children residing abroad expenses in connection with foreign travel, education and medical care of parents, spouse and children;
- 6. "foreign exchange" means foreign currency and includes,- deposits, credits and balances payable in any foreign currency drafts, travelers cheques, letters of credit or bills of exchange, expressed or drawn in Indian currency but payable in any foreign currency, drafts, travelers cheques, letters of credit or bills of exchange drawn by banks, institutions or persons outside India, but payable in Indian currency;
- 7. "person resident in India" means- (i) a person residing in > 182 days during the course of the preceding financial year but does not include a person who has gone out of India or who stays outside India, in eithe case- for or on taking up employment outside India, or for carrying on outside India a business or vocation outside India, for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period; a person who has come to or stays in India, in either case, otherwise than- for or on taking up employment in India, or for carrying on in India a business or vocation in India, or (i) for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period; any person or body corporate registered or incorporated in India an office, branch or agency in India owned or controlled by a person
- 8. CHAPTER II-REGULATION AND MANAGEMENT OF FOREIGN EXCHANGE no person shall- deal in or transfer any foreign exchange or foreign security to any person not being an authorized person; make any payment to or for the credit of any person resident outside India in any manner; receive otherwise through an authorized person, any payment by order or on behalf of any person resident outside India in any manner enter into any financial transaction in India as consideration for or in association with acquisition or creation or transfer of a right to acquire, any asset outside India by any person
- 9. no person resident in India shall acquire, hold, own, possess or transfer any foreign exchange, foreign security or any immovable property situated outside India. Current account transactions. Any person may sell or buy foreign exchange to or from an authorized person if such sale is a current account transaction: Provided that the Central Government may, in public interest and in consultation with the Reserve Bank, impose such reasonable restrictions for current account transactions as may be prescribed Capital account transactions. (1) Subject to the provisions of sub-section (2), any person may sell or buy foreign exchange to or from an authorized person for a capital account transaction.
- 10. Without prejudice to the generality of the provisions of sub-section (2), the Reserve Bank may, by regulations, prohibit, restrict or regulate the following transfer or issue of any foreign security by a person resident in India; transfer or issue of any security by a person resident outside India; transfer or issue of any security or foreign security by any branch, office or agency in India of a person resident outside India; any borrowing or lending in rupees in whatever form or by whatever name called; any borrowing or lending in rupees in whatever form or by whatever name called between a person resident in India and a person resident outside India; deposits between persons resident in India and persons resident outside India; export, import or holding of currency or currency notes; transfer of immovable property outside India, other than a lease not exceeding five years, by a person resident in India;
- 11. Export of goods and services. Every exporter of goods shall; furnish to the Reserve Bank or to such other authority a declaration in such form and in such manner as may be specified, containing true and correct material particulars, including the amount representing the full export value or, if the full export value of the goods is not ascertainable at the time of export, the value which the exporter, having regard to the prevailing market conditions, expects to receive on the sale of the goods in a market outside India; Furnish to the Reserve Bank such other information as may be required by the Reserve Bank for the purpose of ensuring the realization of the export proceeds by such exporter.
- 12. CHAPTER III- AUTHORISED PERSON The Reserve Bank may, on an application made to it in this behalf, authorize any person to be known as authorized person to deal in foreign exchange or in foreign securities, as an authorized dealer, money changer or off-shore banking unit or in any other manner as it deems fit.
- 13. CHAPTER IV-CONTRAVENTION AND PENALTIES If any person contravenes any provision of this Act, or contravenes any rule, regulation, notification, direction or order issued in exercise of the powers under this Act, or contravenes any condition subject to which an authorization s issued by the Reserve Bank, he shall, upon adjudication, be liable to a penalty up to thrice the sum involved in such contravention where such amount is quantifiable, or up to two lakh rupees where the amount is not quantifiable, and where such contravention is a continuing one, further penalty which may extend to five thousand rupees for every day after the first day during which the contravention continues.
- 14. CHAPTER V- ADJUDICATION AND APPEAL Appointment of Adjudicating Authority. For the purpose of adjudication under section 13, the Central Government may, by an order published in the Official Gazette, appoint as many officers of the Central Government as it may think fit, as the Adj dicating Authorities for holding an inquiry in the manner prescribed after giving the person alleged to have committed contravention under section 13, against whom a complaint has been made under sub-section (3) (hereinafter in this section referred to a the said person) a reasonable opportunity of being heard for the purpose of imposing any penalty: Provided that where the Adjudicating Authority is of opinion that the said person is likely to abscond or is likely to evade in any manner, the payment of penalty, if levied, it may direct the said
- 15. Appeal to Appellate Tribunal. Save as provided in sub-section (2), the Central Government or any person aggrieved by an order made by an Adjudicating Authority, other than those referred to in sub-section (1) of section 17, or the Special Director (Appeals),may prefer an appeal to the Appellate Tribunal: Provided that any person appealing against the order of the Adjudicating Authority or the Special Director (Appeals) levying any penalty, shall while filing the appeal, deposit the amount of such penalty with such authority as may be notified by the Cental government.