Enforcement of foreign exchange management act fema is entrusted to a separate directorate, which undertakes investigations on contraventions of the act. However the cases under fera can be initiated with in 2 years from repeal of fera i. Foreign exchange policy and its operations in pakistan are formulated and regulated in accordance with the provisions of the foreign exchange regulation act, 1947. Foreign exchange regulation act and foreign exchange management act presented by. Fera applied to all citizens of india, all over india.
It was amended by the foreign exchange regulation amendment act 1993 and later in 2000, was replaced by fema. These are important basic information about foreign exchange regulation act fera. In these regulations, unless the context requires otherwise. 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. These legislations, rules and regulations relating to foreign exchange management act, 1999, can be divided in to the followings. 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.
Foreign exchange management act, 1999 bare acts law. Act means the foreign exchange management act, 1999 42 of 1999 ii. The provision of fema, are in consistent with income tax act, in respect to the definition of term resident. This new act is in consonance with the frameworks of the world trade organisation wto. Difference between fera and fema pdf a key difference between fera and fema is that the former regulated the foreign trade while the later encouraged it. Foreign exchange management act fema features of fema. No unauthorised person would be allowed to deal in foreign exchange. 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. 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. There was a big difference in the definition of resident, under fera, and income tax act.
In this video i have tried to explain about fema act 1999 hope everyone like this video. 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. A breif explanation for nris nris frequently hear the words fera and fema when it comes to dealings the involve india. Foreign exchange regulation act, 1947 and notifications issued there under. It was formulated in the year 1999 while it replaced fera foreign exchange regulation act. 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. This act seeks to make offences related to foreign exchange civil offences. The foreign exchange management act fema was an act passed in the winter session of parliament in 1999, which replaced foreign exchange regulation act. Foreign exchange management act, 1999 foreign travel a. Fera was established as a result of the federal emergency relief act and was replaced in 1935 by the works progress administration. The foreign exchange regulation act 1947 bangladesh bank. The foreign exchange management act 1999 or in short fema has been introduced as a replacement for earlier foreign exchange regulation act fera. Though certain amendments were made in 1993 but they were not sufficient.
This act may be called the foreign exchange regulation act, 1973. The object of this act is to regulate, in the economic and financial interest of pakistan, certain. Fathoming fema overview of provisions of foreign exchange management act, 1999 fema and rules and regulations there under rajkumar s adukia, acs, mumbai. The main objective behind the foreign exchange management act 1999 is to consolidate and amend the law relating to foreign exchange with objective. The central government of india formulated an act to encourage external. Foreign exchange management act fema, 1999 foreign exchange management act fema,1999. Fera was enacted in september 1973 and it came in force from january 1, 1974.
Foreign exchange regulation act was formulated and implemented when the country was experiencing challenges in its foreign exchange reserves. Provisions of foreign exchange management act fema provides free transaction on current account subject to the guidelines by the rbi. It is an act to manage the foreign exchange of india as opposed to fera which was enacted to regulatecontrol the foreign exchange. Main features of the foreign exchange management act fema. Fema was promulgated in the year 1999, to repeal and replace the earlier 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. 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. The act applies to the whole country and to all the branches and agencies of the body corporate operating outside india, whose owner or. 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. Fera was a draconian police law, where violation was a criminal offence. However until fema is enacted the provisions of fera was applied.
The overall structure of foreign exchange management act, 1999 is covered by legislations, rules and regulations. The foreign exchange regulation act fera is legislation that was passed by the indian parliament in 1973 and came into effect as of. Fema, being an enactment of exchange control laws in replacement of the foreign exchange regulation act, 1973 fera, would form a part of the public policy of india. 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. As their name specifies, fera lays emphasis on the regulation of currencies, whereas the fema manages foreign exchange, i. Also law violators under fema were treated as civic offenders rather than as criminals 5as under fera. Foreign exchange management act, 1999 42 of 1999 and in supersession of. Nikhil agarwalneha gargneha baliwalmegha singhmegha mahasvarinavdeep kaurmohit. The foreign exchange regulation act fera was passed in 1973. Archived from the original pdf on 9 september 2012. What is fera, what is fema, brief explanation for nris. Difference between fera and fema with comparison chart.
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. An act to consolidate and amend the law relating to. The act may be called the foreign exchange management act 1999. Foreign exchange management act department for promotion. The department of homeland securitys federal emergency management agency fema public assistance program, under the authority of the robert t. Rules regulations notifications orders circulars statutory ordinance statutes. The foreign exchange management act, 1999 fema is an act of the parliament of india to. Progression of fera to fema and its impact on foreign exchgane in india. Whereas under fema, permission for current account transactions had already been granted in the law itself section 5, and for capital account. Accordingly, on june 1, 2000, the foreign exchange management act, 1999 fema brought in force to replace the then existing fera. Foreign exchange management act, 1999 fema emerged as a replacement or say an improvement over the old foreign exchange regulation act, 1973 fera. Stafford disaster relief and emergency assistance act stafford act, as amended, can provide grants for educational facilities after a. Fera was repealed in 1998 and foreign exchange management act fema was enacted.
Foreign exchange management debt instruments regulations. Here is a brief summarized description of what fera and fema mean. The act is also applicable to all branches, offices and agencies outside india owned or controlled by a person who is a resident of india. April 14, 2015 dear all welcome to the refurbished site of the reserve bank of india. Fema was proposed by the both house of the parliament in dec. The foreign exchange regulation act fera of 1973 in india was replaced on june. As their name specifies, fera lays emphasis on the regulation of currencies, whereas the fema manages. Foreign investors, frequently hear the terms fera and fema, when they deal with india. Difference between fera and fema explained day today gk. Now the criteria of in india for 182 days to make a person resident has been brought. Fema contains 7 chapters divided into 49 sections supreme legislation.
Fema or foreign exchange management act was introduced in the year 1999 to replace fera foreign exchange regulations act. This was meant to close all the loopholes and drawback of fera and hence major economic reforms were introduced under this act. One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise. Foreign exchange management act, 1999 foreign travel attention of authorised dealers is invited to the government of india notification no. 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. In the budget of 199798, the government had proposed to replace fera 1973, by fema foreign exchange management act. 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. Reserve bank of india foreign exchange management act. Fema was intoduced because the fera did not fit in with the postliberalization.
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