FEMA , 1999

Foreign 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 News
Dec 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 FERA
Differences FERA FEMA
1. Provisions Complex 81 Sec Simple 49 Sec

2.Definitions Current A/c not Current a/c,

defined service all defined
3.Authorised Narrow Definition Has been widened
Person to include banks

4.Compatibility Not dealt Considers resident

with IT in India similar to
IT
5.Punishment type Criminal offence Civil Offence, with
monetary fine

6.Quantity of 5 Times the Amt. 3 times the Amt.

monetary penalty

7.Appeal AA went to high Special dir.

Court (appeals), Appelate
Tribunal / High C
8.Right of No help allowed Sec 32 gives rt to
assistance help of legal
practitioner
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