opportunities and challenges of FEMA act
Answers
Answer:
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".Objective of the Act: The main objectives of FEMA is to utilize foreign exchange resource of the country effectively. It is facilitates external trade, payment, orderly development & maintenance of foreign exchange in India. It Is applicable to all parts of India.Activities 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. It is FEMA that gives the central government the power to impose the restrictions.
Free transactions on current account subject to a reasonable restrictions that may be imposed.
Without general or specific permission of FEMA, MA restricts the transactions involving foreign exchange or foreign security and payments from outside the country to India – the transactions should be made only through an authorised person.
Deals in foreign exchange under the current account by an authorised person can be restricted by the Central Government, based on public interest generally.
Although selling or drawing of foreign exchange is done through an authorized person, the RBI is empowered by this Act to subject the capital account transactions to a number of restrictions.
Residents of India will be permitted to carry out transactions in foreign exchange, foreign security or to own or hold immovable property abroad if the currency, security or property was owned or acquired when he/she was living outside India, or when it was inherited by him/her from someone living outside India.
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