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Foreign Exchange ManagementAct, 1999 is the regulatory statute that governs the foreign exchange in India. FEMA advocates a balance of payment as the true record of dealings in goods, services, and assets between citizens of two countries.
Important points to note under FEMA Act
- FEMA only applies to Indians who live in India. It does not apply to Indian citizens who live in other countries. The applicant must have spent at least 182 days in India during the preceding financial year to be considered.
- FEMA gave the Central Government the authority to impose limitations and oversee three aspects of foreign exchange: payments and receipts made to anyone outside India.
- FEMA also states that certain areas, such as dealing in foreign currencies, require specific RBI or government approvals.
- FEMA divides foreign exchange transactions into two categories: Capital Account and Current Account. Foreign investments have become an important part of corporate strategies. These are multi-disciplinary regulated transactions and FEMA lays explicit regulations and compliance requirements to deal with the same. Compliances and procedural aspects need to be adhered to while dealing in foreign exchange to avoid violation of FEMA provisions and its regulations that attracts penalties. ASC Group having experience team of professional help companies including MNC’s to adhere with compliances and procedural aspects required under Foreign Exchange Management Act.
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