Salient features of foreign exchange management act 1999

The foreign exchange management act, 1999 fema is an act of the parliament of india to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in india. Machinery responsible for various aspects of fema is. Apr 23, 2017 this was later replaced with the foreign exchange regulation act fera, 1973. In an interview with the product head of frontier research, travis gomez explained the salient features of the new forex act. Salient features of fema citizenship abolished and residentship introduced. Foreign exchange management act, 1999 fema fera 1973 replaced by fema 1999 and came into effect from 01. This document is highly rated by b com students and has been viewed 5179 times. Short title, extent, application and commencement act no. This act seeks to make offences related to foreign exchange civil offences.

It gives powers to the central government to regulate the flow of payments to and from a person. Fema expands to foreign exchange management act, which was promulgated in the year 1999, to repeal and replace the earlier act. Definitions of capital account transaction and current account transaction have been. Salient features of depository receipts scheme, 2014. Fera was replaced by foreign exchange management act fema, 1999. Main features of the foreign exchange management act fema. The overall structure of foreign exchange management act, 1999 is covered by legislations, rules and regulations. Foreign exchange management act, 1999 an act to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in india be it enacted by parliament in the fiftieth year of the republic of india as. Any contravention of the applicable provisions will invite penal action or adjudication under the foreign exchange management act, 1999. Secondly, it has failed to address the root cause of the problem.

An offshore banking unit shall be governed only by the reserve bank regulations and no. Foreign exchange management act fema, 1999 edugeneral. Fema act 1999 foreign exchange management act, 1999 fema. Fema was introduced because the fera didnt fit in with postliberalisation policies. The geographical indications of goods registration and protection act, 1999 gi act is a sui generis act of the parliament of india for protection of geographical indications in india. The salient features of the new framework are as under. This was later replaced with the foreign exchange regulation act fera, 1973. The directions contained in this circular have been issued under section 104 and 112 of the foreign exchange management act, 1999 42 of 1999 and are without prejudice to permissions approvals, if any, required under any other law. The competition act, 2002 which passed on th january, 2003 is a laudable step towards harmonizing international trade policy. In this act, unless the context otherwise requires, in this act, unless the context otherwise requires, adjudicating authority means an officer authorised under subsection 1 of section 16.

Ecb policy salient features of new ecb framework taxguru. The income tax department never asks for your pin numbers, passwords or similar access information for credit cards, banks or other financial accounts through email the income tax department appeals to taxpayers not to respond to such emails and not to share information relating to their credit card, bank and other financial accounts. May 05, 2010 the foreign exchange management act, 1999 fema replaces the foreign exchange regulation act fera. Fema is a regulatory mechanism that enables the reserve bank of india to pass regulations and the central government to pass rules relating to foreign exchange in tune with the foreign trade policy of india. Fema part 1 foreign exchange management act 1999 please watch. The foreign exchange management act, 1999 was enacted to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of. Aug 14, 2014 fema came into act on the 1st day of june, 2000. Fera was very strict and even has a provision for imprisonment. The salient features of the foreign trade act 1992 breaking. This is to make possible trade and commerce and to advance growth and safeguard with regard to foreign exchange in the. 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 read with foreign exchange management foreign currency accounts by a person resident in india regulations, 2015 issued vide 1 notification no. Fera was amended in 1993 to bring about certain changes, as a result of introduction of economic reforms and liberalization of indian economy. It replaced the archaic the monopolies and restrictive trade practices act, 1969. Facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market.

Fcra act and its implications on working of ngos gktoday. Foreign exchange management act fema 1999 came into effect in india from june 1, 2000 replacing earlier law fera 1973. India, as a member of the world trade organization wto, enacted the act to comply with the agreement on traderelated aspects of intellectual property rights. Within the contours of the regulations changed from time to time, reserve bank of india issues directions to authorised dealers ads under section 11 of the foreign exchange management act fema, 1999. The entire contents of this website is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation and do not constitute any sort of professional advice or a formal recommendation. Fema 1999 foreign exchange management act 1999 fema part. This represents a shift in the policy direction from one of restricting foreign exchange movement to one that is facilitating exchange rate movement. Fera was introduced in 1974 to consolidate and amend the then existing law relating to foreign exchange. Section 2 in the foreign exchange management act, 1999.

Fema was proposed by the both house of the parliament in dec. The foreign exchange management act fema was an act passed in the winter session of parliament in 1999, which replaced foreign exchange regulation act. The salient features of foreign exchange management transfer or. Apr 28, 2016 fema started after the fera act was repealed fera was the previous trade policy that discouraged foreign currency in an economy and insulated the economy from being an open economy as industrial reforms in 1991 replacing of fera with fema is. The foreign exchange management act, 1999 fema is an act of the parliament of india to consolidate and amend the law relating to foreign exchange with. The bill aims to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market india. 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. Money changing business can be undertaken by entities authorised by the reserve bank under section 10 of the foreign exchange management act, 1999. Fema 1999 foreign exchange management act 1999 fema. In the budget of 199798, the government had proposed to replace fera1973, by fema foreign exchange management act 1999. The foreign exchange management act fema was an act passed in the winter session of parliament in 1999, which replaced foreign exchange regulation. Features foreign exchange management act 2000, business. The new economic reforms introduced in india changed the structure of fera and it was substituted by foreign exchange management act fema, 1999. The salient features of the directions issued by rbi which lay down the modalities as to how the import of gold transaction has to be.

The foreign exchange management act 1999 or in short fema has been introduced as a replacement for earlier foreign exchange regulation act fera. Jan 30, 2015 by piyali sengupta, hnlu, raipur editors note. Know what is fema act 1999 or foreign exchange management act, 1999, objectives and features of fema, what all fema covers and on whom fema is. Fera the fourletter acronym for foreign exchange regulation act is a legislation that came into existence in 1973 with the purpose to regulate certain dealings in foreign exchange, impose restrictions on certain kinds of payments and to monitor the transactions impinging the foreign exchange and the import and export of currency. It was passed in the winter session of parliament in 1999, replacing the foreign. Foreign exchange management act, 1999 fema emerged as a replacement or say an improvement over the old foreign exchange regulation act, 1973 fera. Aug 12, 2017 the act extends to branches and agencies of the indian multinationals operating outside the country, which is owned or controlled by the person who is the resident of india. Explain the salient features of competition act, 2002. The paper deals with the foreign exchange and management act, 1999 comprehensively. Fema gives power to the central government for imposing restriction on activities like making payments to a person situated outside of the country or receiving money through them. Foreign investors, frequently hear the terms fera and fema, when they deal with india. The competition act, 2002 was enacted by the parliament of india and governs indian competition law. If a limited liability partnership has received foreign direct investment and if an individual is appointed as designated partner in that limited liability partnership, there is a condition or requirement that the individual must satisfy the condition of residency test under foreign exchange management act and also must satisfy the conditions.

It was adopted by the parliament in 1999 and is known as the foreign exchange management act, 1999. An offshore banking unit shall be governed only by the reserve bank regulations and no other regulations shall apply to it. Enforcement directorate to investigate provisions of the act, the central government. An offshore banking unit is not regarded as an authorized dealer for the purpose of the foreign exchange management act, 1999, its rules or regulations, unless so directed by the reserve bank. Salient features of fema foreign exchange management act. Oct 24, 2016 fera was replaced by foreign exchange management act fema, 1999.

Foreign direct investment in limited liability partnership. Mar 30, 2020 features foreign exchange management act 2000, business law b com notes edurev is made by best teachers of b com. It will facilitate trade rather than prevent misuse of foreign exchange. Main features of foreign exchange management act, 1999. Jan 03, 2017 firstly, the fcra has duplicate mandate already given to several other legislations such as prevention of money laundering act 2002, unlawful activities prevention act 1967, foreign exchange management act, 1999 and income tax 1961for auditing propose. As their name specifies, fera lays emphasis on the regulation of currencies, whereas the fema manages foreign exchange, i. The main purpose of the act was to modify and unite foreign exchange laws. Fema started after the fera act was repealed fera was the previous trade policy that discouraged foreign currency in an economy and insulated the economy from being an open economy as industrial reforms in 1991 replacing of fera with fema is. Fema contains 7 chapters divided into 49 sections supreme legislation.

Geographical indications of goods registration and. The fema gives the central government the power to restrict the cash outflow to overseas. Fera was not suitable in the new and liberal economy, thus it was replaced by foreign exchange management act fema 1999, which came into effect from 1st june 2000. Foreign exchange regulation act, 1974 or fera was introduced in the year 1974 with the prime objective of conserving preserving the foreign exchange.

The basic objective of this act is to facilitate external trade and payments and to promote the orderly development and maintenance of foreign exchange market in india. Foreign exchange management act 1999 forex youtube. Main features of the foreign exchange management act and. Foreign exchange management act 1999 summary of key points. An act to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in india.

The main objective of fera was conservation and proper utilization of the foreign exchange resources of the country. Fema has been brought to consolidate and amend the law relating to foreign exchange. Foreign exchange management act, 1999 summary bankexamstoday. What is governments intention with regard to the new forex act. In the budget of 199798, the government had proposed to replace fera1973, by fema foreign exchange management act. Foreign exchange and management act, 1999 academike. Apr 25, 2012 the overall structure of foreign exchange management act, 1999 is covered by legislations, rules and regulations. A new scheme called depository receipts scheme, 2014 dr scheme, 2014 for investments under adrgdr have been notified by the.

Promulgated in the year 1999, fema, unlike the erstwhile law. Difference between fera and fema with comparison chart. Sep 16, 2014 the salient features of the foreign trade act 1992 standard it has empowered the central government to make provisions for development and regulation of foreign trade by facilitating imports into, and augmenting exports from india and for all matters connected therewith or incidental there to. Under this legislation, the competition commission of india was established to prevent the activities that have an adverse effect on competition in india. These legislations, rules and regulations relating to foreign exchange management act, 1999, can be divided in to the followings. Section 2 in the foreign exchange management act, 1999 2. Foreign exchange management act fema features of fema. Mar 29, 2019 in the budget of 199798, the government had proposed to replace fera1973, by fema foreign exchange management act. The foreign exchange management act, 1999 fema replaces the foreign exchange regulation act fera. Mar 30, 2015 foreign exchange regulation act, 1974 or fera was introduced in the year 1974 with the prime objective of conserving preserving the foreign exchange.