There was a demand for substantial modification in fera owing to economic liberalization and improving foreign exchange reserve positions, which lead to new act, foreign exchange management act, 1999. The foreign exchange management act 1999 or in short fema has been introduced as a replacement for earlier foreign exchange regulation act fera. Foreign exchange management act, 1999 bare acts law. Fema contains 7 chapters divided into 49 sections supreme legislation. Progression of fera to fema and its impact on foreign exchgane in india. Fema 52000rb dated may 3, 2000, as amended from time to time, the reserve bank makes the following regulations relating to deposits between a person resident in india and a person resident outside india, namely. This act may be called the foreign exchange regulation act, 1973. These are important basic information about foreign exchange regulation act fera. Mrtp act 1969 monopolies restrictive trade practices act. A draft for the foreign exchange management bill fema was prepared by the government of india to replace fera keeping in view of the indian economy. Fema an act initiated to facilitate external trade and payments and to promote orderly management of the forex market in the country. The overall structure of foreign exchange management act, 1999 is covered by legislations, rules and regulations.
Fema was passed since fera did not meet the requirements of the policies being implemented after liberalization. Difference between fera and fema foreign exchange regulation. In which year, the foreign exchange management act fema. The act established the federal emergency relief administration, a grantmaking agency authorized to distribute federal aid to the states for relief. These legislations, rules and regulations relating to foreign exchange management act, 1999, can be divided in to the followings. The foreign exchange management act areas of fema practice. However until fema is enacted the provisions of fera was applied. The objective of facilitating external trade and payments for promoting the orderly development and maintenance of foreign exchange market in india. The foreign exchange management act,1999 42 of 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.
Prevention of money laundering act,2002 as amended by the prevention of money laundering amendment act,2005 the conservation of foreign exchange prevention of smuggling activities act, 1974 cofeposa smugglers and foreign exchange manipulators forfeiture of property act, 1976 safema rules. Now the criteria of in india for 182 days to make a person resident has been brought. 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 follows. Fema foreign exchange management act 1999 jaiib caiib video. Highlights on foreign exchange management act fema, 1999. Foreign exchange management act was enactedin1999 with 25 original notifications came into force with effect from june 1, 2000. Fera was repealed in 1998 and foreign exchange management act fema was enacted. Get jaiibcaiib previous year questions, study notes pdf and full course videos. The foreign exchange regulation act fera is legislation that was passed by the indian parliament in 1973 and came into effect as of january 1, 1974. The difference between the title, fera and fema of legislation. Crisp news summaries and articles on current events about fema for ibps, banking, upsc, civil services.
The fema, also referred to as the foreign exchange management act was introduced in the year 1999. The scope and objective of fema was mainly to amend the laws related to foreign exchangeto facilitate external trade and payments and to develop the foreign exchange market in india. Latest current affairs and news current affairs today. Foreign exchange regulation act fera was introduced at a time when foreign exchange forex reserves of the country were low. Fema was intoduced because the fera did not fit in with the postliberalization.
Feb 24, 2012 the foreign exchange management act 1999 or in short fema has been introduced as a replacement for earlier foreign exchange regulation act fera. The main change that has been brought is that fema is a civil law, whereas the fera was a criminal law. Foreign exchange regulation act and foreign exchange management act presented by. In view of this change, the title of the legislation has rightly been changed from foreign exchange regulation act to foreign exchange management act. The court held that fera and fema were based on materially different. A breif explanation for nris nris frequently hear the words fera and fema when it comes to dealings the involve india. Sep 14, 2011 fera was enacted in september 1973 and it came in force from january 1, 1974. Foreign investors, frequently hear the terms fera and fema, when they deal with india. Main features of the foreign exchange management act fema. Family experiences and new deal relief national archives. What is fema foreign exchange management act act 1999.
Foreign exchange management act 1999 replaced the fera. Fera is an act which is enacted to regulate payments and foreign exchange in india, is fera. Fema has archived the first and second editions at. This was meant to close all the loopholes and drawback of fera and hence major economic reforms were. Practical issues in foreign transactions fema an overview. Also law violators under fema were treated as civic offenders rather than as criminals 5as under fera. Chapter 18 mrtp act, fera, and fema chapter outline monopolies and restrictive trade practices act mrtp, 1969 foreign exchange regulation act fera, 1973 foreign exchange management act fema, 1999 case selection from business environment, 2nd edition book. Foreign exchange management act, 1999 42 of 1999 and in supersession of. To comply with title iii of the no fear act, fema must, among other requirements, post a summary of the statistical data relating to the equal employment opportunity complaints filed with the agency. Fema or foreign exchange management act was introduced in the year 1999 to replace fera foreign exchange regulations act. Keeping in view the objective of promoting ease of doing business, a need was felt toconsolidatethe.
Notification and federal employee antidiscrimination and retaliation act of 2002 pdf 52kb. Fema came out as an extension of the earlier foreign exchange act fera. The foreign exchange management act has repealed the fera. Udeshi chief general manager annexure foreign travel a. One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise. 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. Moreover, any offence under fera was ad criminal offence liable to imprisonment. Foreign exchange management act the foreign exchange management act 1999 or in short fema has been introduced as a replacement for earlier foreign exchange regulation act fera.
Fera was mainly formulated to deal with deep crunch of foreign exchange post world war ii and hence was a rigid piece of legislation which have left all the businesspeople and indian citizens at the mercy of enforcement directorate as violence of fera was considered a criminal act and there were major penalties associated. Whereas it is expedient in the economic and financial interests of pakistan to provide for the regulation of certain payments, dealings in. The foreign exchange management act, 1999 fema is an act of the parliament of india to. On behalf of the federal emergency management agency fema, i am pleased to issue this revised third edition version 3.
The fera was creating obstacles in the development of the country so government replaced it by fema in 1999. Foreign exchange regulation act 1973, 43 of 1973 restriction on holding of immovable property outside india no person resident in india shall, except with the general or special permission of the reserve bank, acquire or hold or transfer or dispose of by sale, mortgage, lease, gift, settlement or otherwise, any immovable property situate. There was a big difference in the definition of resident, under fera, and income tax act. Archived from the original pdf on 9 september 2012. Foreign exchange management act fema mba knowledge base. Foreign exchange management act, 1999 foreign travel a. Fema was introduced because the fera didnt fit in with postliberalisation policies. No unauthorised person would be allowed to deal in foreign exchange. 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. On 1st june, 2000, foreign exchange management act fema, 1999 was adopted and effected by the government in place of foreign exchange regulation act fera. The no fear act requires that federal agencies be accountable for violations of antidiscrimination and whistleblower protection laws. There is a paradigm shift from objective under fera. Enacted in 1973, in the backdrop of acute shortage of foreign exchange in the country, fera had a.
Nikhil agarwalneha gargneha baliwalmegha singhmegha mahasvarinavdeep kaurmohit goyalnikhil chaddanitin sachdevmohit badera 2. Fema foreign exchange management act 1999 jaiib caiib study material, mock tests by learning sessions. Aug 12, 2017 foreign exchange management act, 1999 fema emerged as a replacement or say an improvement over the old foreign exchange regulation act, 1973 fera. Apr 26, 2017 the foreign exchange management act, 1999, fema is an act to consolidate and amend the law relating to foreign exchange, with the objective of facilitiating external trade and, payments and for promoting the orderly development and maintenance of the foreign exchange market in india. Foreign exchange management transfer or issue of security by a person resident outside indiafirst amendment regulations, 2003. Mlp covers wide range of crimes including various sections of indian penal code ipc, prevention of corruption act, narcotic drugs and psychotropic substances act, arms and sita. 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. Vii of 1947 11 th march, 1947 an act to regulate certain payments, dealings in foreign exchange and securities and the import and export of currency and bullion. Foreign exchange management act, 1999 fema came into force with effect from june 1, 2000. Enacted in 1999, replaced the earlier foreign exchange regulation act fera, 1973. It was formulated in the year 1999 while it replaced fera foreign exchange regulation act. Fera was established as a result of the federal emergency relief act and was replaced in 1935 by the works progress administration wpa.
Here is a brief summarized description of what fera and fema mean. Reserve bank of india foreign exchange management act. 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. Foreign exchange regulation act and foreign exchange management actpresented by.
The government of india formulated fema or foreign exchange management act to encourage the external payments and across the border trades in india. Fema is a civil law, while fera was a draconian police law. Fema consolidate and amend the law relating to foreign exchange facilitating external trade and payments promoting the orderly development and. Compounding of contraventions refers to the process where the individual or the corporate entity can admit the contravention and seek redress from the reserve bank, restricted to a specific sum. The main involving those 2 terminologies is the main aim as fera has been manufactured in a bid to guard and forestall abuse of overseas alternative. Both the department of homeland security and fema will post to the respective public web sites statistical information in accordance with the no fear act.
The foreign exchange management act fema was an act passed in the winter session of parliament in 1999, which replaced foreign exchange regulation act. This was meant to close all the loopholes and drawback of fera and hence major economic reforms were introduced under this act. As their name specifies, fera lays emphasis on the regulation of currencies, whereas the fema manages. An act to consolidate and amend the law relating to. The foreign exchange regulation act fera of 1973 in india was replaced on june. The federal emergency relief administration fera was the new name given by the roosevelt administration to the emergency relief administration era which president franklin delano roosevelt had created in 1933. Difference between fera and fema with comparison chart. Fema regulations prior rbi seek approval for certain categories of capital. Foreign exchange management act department for promotion. This data will be updated on a quarterly basis for the current fiscal year. In this video i have tried to explain about fema act 1999 hope everyone like this video. Foreign exchange management act 1999 summary of key points.
Fera was established as a result of the federal emergency relief act and was replaced in 1935 by the works progress administration. It was amended by the foreign exchange regulation amendment act 1993 and later in 2000, was replaced by fema. The foreign exchange regulation act fera was passed in 1973. Fema contravention and penalties details enterslice. In which year, the foreign exchange management act fema came into force. 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. This article is pointing the differences between the fera and fema. Fema part 2 foreign exchange management act 1999 duration. This act seeks to make offences related to foreign exchange civil offences. The provision of fema, are in consistent with income tax act, in respect to the definition of term resident.
The arbitral award of june 2016 entitled ntt docomo to exercise its right. The practical aspects are covered in rules made by. Fera was repealed in 1998 by the government of atal bihari vajpayee and replaced by the foreign exchange management act, which liberalised foreign exchange controls and restrictions on foreign investment. It was replaced by the foreign exchange management act fema, which was passed in the winter session of parliament in 1999. Taxmanns guide to foreign exchange management act1999.
Fera was a draconian police law, where violation was a criminal offence. Enforcement of foreign exchange management act fema is entrusted to a separate directorate, which undertakes investigations on contraventions of the act. Fera 1973 act was introduced at a time when foreign exchange. Fera was enacted in september 1973 and it came in force from january 1, 1974. Fera proceeded on presumption that all foreign exchange earned by indian residents rightfully belonged to the government of india and had to be collected and surrendered to the reserve bank of india rbi.
On behalf of the federal emergency management agency. Apr 25, 2012 the overall structure of foreign exchange management act, 1999 is covered by legislations, rules and regulations. Content there are 49 sections out of which 12 section relate to operational part and rest with penal provisions there were 81 sections out of which 32 sections related to operational part and rest deals with penalty, appeals etc. Contravention is the breach of provisions and norms under the foreign exchange management act, or fema 1999. Fera applied to all citizens of india, all over india. Difference between fera and fema explained day today gk. The foreign exchange regulation act fera was legislation passed in india in 1973. Difference between fema and fera points of comparison fema 2000 fera 1973 1.
A1997 b1998 c1999 d2000 show answer 2000 the foreign exchange management act 1999 or in short fema has been introduced as a replacement for earlier foreign exchange regulation act fera. The federal emergency relief act of may 12, 1933, implemented president roosevelts first major initiative to combat the adverse economic and social effects of the great depression. The foreign exchange regulation act of 1973 fera in india was repealed on 1st june, 2000. The objective of foreign exchange management act, 1999 act for short is to facilitate external trade and payments and maintenance of foreign exchange in india. The act was a replacement of the fera or foreign exchange regulation act. April 14, 2015 dear all welcome to the refurbished site of the reserve bank of india. The areas of practice would be advising and filing of. It is an act to manage the foreign exchange of india as opposed to fera which was enacted to regulatecontrol the foreign exchange. What is fera, what is fema, brief explanation for nris. Dec 20, 2017 the act established the federal emergency relief administration, a grantmaking agency authorized to distribute federal aid to the states for relief.
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