FEMA , 1999Foreign Exchange Management Act,1999

• So what is FEMA ?• What is FERA and how it is

related to FEMA.• Salient features of FEMA.• Difference between FERA and

FEMA.

Recent NewsDec 5th 2012 : Objection raised by opposition on FDI in multi brand is put to vote and opposition loses @ Lok Sabha.

Dec 6th 2012:Opposition raises irregularities in the conduct of Walmart as they had violated the regulations in FEMA, before FDI was made possible.

Dec 7th 2012 :The same happens @ Rajya Sabha when objection by opposition was put to vote regarding FDI in multi brand.

• The Foreign Exchange Management Act (1999) or in short FEMA has been introduced as a replacement for earlier Foreign Exchange Regulation Act (FERA). FEMA came into act on the 1st day of June, 2000.

• The main objective behind the Foreign Exchange Management Act (1999) is to consolidate and amend the law relating to foreign exchange with objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.

• FEMA is applicable to the all parts of India. The act is also applicable to all branches, offices and agencies outside India owned or controlled by a person who is resident of India.

FROM FERA TO FEMA

• Liberal form of FERA.• Extends whole of India.• It is more human and natural.• Removes restrictions on drawal

of foreign exchange.

SALIENT FEATURES OF FEMA

• Citizenship abolished and

residentship introduced.• Greater importance to IT.• Realisation, repartiation and

surrenderof foreign exchange is

now governed by FEMA.

• Resident foreign currency account (RFC).

• Posssession and retention of foreign currency.

• Foreign currency, foreign security or immovable property.

Difference between FEMA and FERADifferences1. Provisions

2.Definitions

3.Authorised Person

4.Compatibility with IT

FERAComplex 81 Sec

Current A/c not definedNarrow Definition

Not dealt

FEMASimple 49 Sec

Current a/c, service all definedHas been widened to include banks

Considers resident in India similar to IT

5.Punishment type

6.Quantity of monetary penalty

7.Appeal

8.Right of assistance

Criminal offence

5 Times the Amt.

AA went to high Court

No help allowed

Civil Offence, with monetary fine

3 times the Amt.

Special dir. (appeals), Appelate Tribunal / High C Sec 32 gives rt to help of legal practitioner

?

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