FEMA and International Taxation
- Foreign Contribution (Regulation) Act, 2010
- Accounts & Audit
- All FCRA services online
- Applicability
- Change of designated bank account, name, address, aim, objects or key members of the association
- Declaration of receipts of foreign contribution
- Foreign Contribution
- Inspection & Seizure
- Introduction
- Penalty
- Registration of the Association
- Restriction on Administrative Expenses
- Restrictions on acceptance of foreign hospitality
- Restrictions on Accepting FC
- Speculative Activity
- Total Ban on acceptance of Foreign Contribution & Hospitality
- Transfer of FC to other Registered or Unregistered Persons
- Foreign Exchange Management Act, 1999
- Acquisition and transfer of Immovable property in India
- Acquisition and Transfer of Immovable Property outside India
- Bank Accounts in India
- Borrowings from Non-residents
- Branch/Liaison/Project Office in INDIA
- Branch/Liaison/Project Office outside India
- Capital & Current Account Transactions
- Compounding & Contravention under FEMA
- Cross Border Merger Regulations
- Introduction
- Investment in India
- Miscellaneous
- Overseas Direct Investments
- Residential Status under FEMA
- Trade Transactions – Import & Export
- International Taxation
Introduction
The Foreign Exchange Management Act, 1999 (FEMA) deals with cross-border investments, foreign exchange transactions and transactions between residents and non-residents. It has come into force from June 1, 2000.
The operation of FEMA is akin to any other commercial law. However as compared to most other commercial laws FEMA is one of the smallest, having only 49 Sections. If guidelines, rules etc. are followed, then the person can undertake most transactions without any approvals. If proposed transactions fall outside the guidelines, one will have to obtain necessary prior approvals. The consequence of any violation is a penalty and if the penalty is not paid within the specified time, then there can be prosecution.
FEMA extends to the whole of India. It also applies to all branches, offices and agencies outside India, which are owned or controlled by a person resident in India, in this respect FEMA can be said to acquire extra-territorial jurisdiction.
It is important to note that RBI/GOI issues various Notifications, Directions, Press Notes, Guidance, etc. from time-to-time to administer FEMA. However, in case of conflict between any of them, the relevant FEMA Notification will prevail.
What FEMA tries to govern?
|
Sr. No. |
Types of Asset / Transaction |
Owned or entered by |
|---|---|---|
|
A) |
Foreign Exchange/Security/ Properties outside India |
Person Resident in India (PRI) |
|
B) |
Foreign Exchange/Security/ Properties in India |
Person Resident Outside India (PRO) |
A Person includes:
- An individual
- A Hindu Undivided Family (HUF)
- A Company
- A Firm
- An association of persons or body of individuals, whether incorporated or not
- Every artificial juridical person not falling in any of the above sub-clauses
- Any agency, office or branch owned or controlled by such person.