Question: How Many Sections Are In FEMA?

Why was Fera replaced?

The Foreign Exchange Regulation Act (FERA) was passed in 1973; the main purpose of which was to ensure the use of foreign exchange.

The FERA was creating obstacles in the development of the country so government replaced it by FEMA in 1999.

This article is pointing the differences between the FERA and FEMA..

What is FEMA PPT?

FEMA came into force on the 1st day of June, 2000. FEMA  consolidate and amend the law relating to foreign exchange  facilitating external trade and payments  promoting the orderly development and maintenance of foreign exchange market in India  49 sections in the Act.

What is FEMA Upsc?

Foreign Exchange Management Act, 1999 (FEMA) came into force by an act of Parliament. It was enacted on 29 December 1999. … It also paved the way for the Prevention of Money Laundering Act, 2002 which came into effect from July 1, 2005. This topic would be of importance in the IAS Exam for both Prelims and Mains.

What is Foreign Exchange Management Act 2000?

The Foreign Exchange Management Act (1999) or in short FEMA has been introduced as a replacement for earlier Foreign Exchange Regulation Act (FERA). FEMA became an act on the 1st day of June, 2000. It was also formulated to promote the orderly development and maintenance of foreign exchange market in India. …

Which transactions are permitted without any approval under FEMA?

In terms of Section 5 of the FEMA, persons resident in India 1 are free to buy or sell foreign exchange for any current account transaction except for those transactions for which drawal of foreign exchange has been prohibited by Central Government, such as remittance out of lottery winnings; remittance of income from …

Where is FEMA applicable India?

FEMA (Foreign Exchange Management Act) is applicable to the whole of India and equally applicable to the agencies and offices located outside India (which are owned or managed by an Indian Citizen). The head office of FEMA is situated at New Delhi and known as Enforcement Directorate.

Is FEMA still in force in India?

In the budget of 1997-98, the government had proposed to replace FERA-1973, by FEMA (Foreign Exchange management act). After the approval of president, FEMA 1999 has come into force w.e.f. June, 2000. …

What does FEMA mean?

Federal Emergency Management AgencyFederal Emergency Management Agency: a federal agency that coordinates the response to disasters in the U.S.

What was FEMA called before?

Federal Civil Defense AdministrationFEMA didn’t start off as FEMA—in fact, it has been reshuffled and reorganized more than perhaps any other key agency in recent US history. Harry Truman started FEMA’s forerunner, the Federal Civil Defense Administration, in 1950.

What is difference between FERA and FEMA?

FERA was an act promulgated, to regulate payments and foreign exchange in India, on the contrary FEMA is an act to promote orderly management of the foreign exchange in India. …

What is FEMA limit?

Under the LRS, Indian citizens can transfer money to bank accounts abroad without needing to get special permission. However, money can only be intended for a set number of purposes, and remittances are allowed only up to a maximum annual limit which is currently set at USD 250,000.2.

Who controls foreign exchange?

Foreign exchange controls are various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents, on the purchase/sale of local currency by nonresidents, or the transfers of any currency across national borders.

What is the penalty for violation of FEMA Act?

-(1) 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 is issued by the Reserve Bank, he shall, upon adjudication, be liable to a …

What are the salient features of FERA?

Salient Features of FERA: Authorisation to the dealers by the Reserve Bank of India for transacting foreign currencies, subject to review and revocation of the authorisation in the case of non-compliance. Authorisation to the money changers for conversion of currencies as per the rates determined by RBI.

What is FERA company?

FERA companies are the companies in which the non-resident interest (viz., foreign equity share capital) was more than 40%.

What are the main features of FEMA?

Main FeaturesActivities such as payments made to any person outside India or receipts from them, along with the deals in foreign exchange and foreign security is restricted. … Free transactions on current account subject to a reasonable restrictions that may be imposed.More items…

What is FEMA and its provisions?

The main objective of FEMA was to help facilitate external trade and payments in India. It was also meant to help orderly development and maintenance of foreign exchange market in India. It defines the procedures, formalities, dealings of all foreignexchange transactions in India.

What is the scope of FEMA?

Objectives of FEMA The primary objective of FEMA act was “facilitating external trade and payments and promoting the orderly development and maintenance of foreign exchange market in India”.