The 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.
Administered by. Ministry of Finance, Department of Economic Affairs · Other Acts of 1999
Preamble
THE FOREIGN EXCHANGE MANAGEMENT ACT, 1999
ACT NO. 42 OF 1999
[29th December, 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:--
What this Act covers
Summary of the Foreign Exchange Management Act, 1999
Key Provisions
1. Applicability
• Extends to the whole of India.
• Applies to branches/offices/agencies outside India owned/controlled by persons resident in India.
• Applies to contraventions outside India by persons to whom the Act applies.
2. Regulation and Management of Foreign Exchange
• Section 3: Prohibits dealing in foreign exchange with non-authorised persons, certain payments, and financial transactions for acquiring assets outside India without permission.
• Section 4: Restricts holding of foreign exchange, foreign securities, or immovable property outside India by persons resident in India.
• Section 5: Allows current account transactions with authorised persons, subject to reasonable restrictions by the Central Government.
• Section 6: Regulates capital account transactions, with the Reserve Bank specifying permissible transactions, limits, and conditions.
• Section 7: Mandates declaration and realisation of export proceeds.
• Section 8: Requires realisation and repatriation of foreign exchange due to persons in India.
• Section 9: Exempts certain cases from realisation and repatriation requirements.
3. Authorised Person
• Sections 10-12: Define authorised persons, Reserve Bank's powers to issue directions, inspect, and more.
4. Contraventions and Penalties
• Sections 13-15: Outline penalties, enforcement, and power to compound contraventions.
5. Adjudication and Appeal
• Sections 16-19: Establish the Adjudicating Authority, appeal processes to the Special Director (Appeals), and the Appellate Tribunal.
Sections
Type to filter. 52 sections.
- 1Short title, extent, application and commencement
- 2Definitions
- 3Dealing in foreign exchange, etc
- 4Holding of foreign exchange, etc
- 5Current account transactions
- 6Capital account transactions
- 7Export of goods and services
- 8Realisation and repatriation of foreign exchange
- 9Exemption from realisation and repatriation in certain cases
- 10Authorised person
- 11Reserve Bank's powers to issue directions to authorised person
- 12Power of Reserve Bank to inspect authorised person
- 13Penalties
- 14Enforcement of the orders of Adjudicating Authority
- 14APower of recover arrears of penalty
- 15Power to compound contravention
- 16Appointment of Adjudicating Authority
- 17Appeal to Special Director (Appeals)
- 18Appellate Tribunal
- 19Appeal to Appellate Tribunal
- 20Omitted
- 21Qualifications, for appointment of Special Director (Appeals)
- 22Omitted
- 23Terms and Conditions of service Special Director (Appeals)
- 24Omitted
- 25Omitted
- 26Member to act as Chairperson in certain circumstances
- 27Staff of Special Director (Appeals)
- 28Procedure and powers of Appellate Tribunal and Special Director (Appeals)
- 29Omitted
- 30Omitted
- 31Omitted
- 32Right of appellant to take assistance of legal practitioner or chartered accountant and of Government, to appoint presenting officers
- 33Members, etc., to be public servants
- 34Civil court not to have jurisdiction
- 35Appeal to High Court
- 36Directorate of Enforcement
- 37Power of search, seizure, etc
- 37ASpecial provisions relating to assets held outside India in contravention of section 4
- 38Empowering other officers
- 39Presumption as to documents in certain cases
- 40Suspension of operation of this Act
- 41Power of Central Government to give directions
- 42Contravention by companies
- 43Death or insolvency in certain cases
- 44Bar of legal proceedings
- 44APowers of Reserve Bank not to apply to International Financial Services Centre
- 45Removal of difficulties
- 46Power to make rules
- 47Power to make regulations
- 48Rules and regulations to be laid before Parliament
- 49Repeal and saving
Rules made under this Act
20 sets of Rules. India Code publishes Rules as a record and a document rather than as text, so these are indexed here and not reproduced. All Rules.
- the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2017.2017
- the Foreign Exchange Management (Acquisition and transfer of immovable property outside India) Regulations, 2015.2016
- the Foreign Exchange Management (Deposit) Regulations, 2016.2016
- the Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations, 2016.2016
- the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015.2016
- the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015.2016
- the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2016.2016
- the Foreign Exchange Management (Remittance of Assets) Regulations, 2016.2016
- Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2015.2015
- Foreign Exchange Management (Export and Import of Currency) Regulations, 2015.2015
- the Foreign Exchange Management (Insurance) Regulations, 2015.2015
- the Foreign Exchange Management (International Financial Services Centre) Regulations, 2015.2015
- the Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2015.2015
- the Foreign Exchange Management (Regularization of assets held abroad by a person resident in India) Regulations, 2015.2015
- the Foreign Exchange Management (Crystallization of Inoperative Foreign Currency Deposits) Regulations, 2014.2014
- Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003.2003
- the Foreign Exchange (Authentication of Documents) Rules, 20002000
- the Foreign Exchange (Compounding Proceedings) Rules 20002000
- the Foreign Exchange Management (Current Account Transactions) Rules, 2000.2000
- the Foreign Exchange Management (Encashment of Draft, Cheque, Instrument and payment of interest) Rules, 2000.2000
Related Acts
- The Finance Act, 1999102 sections
- The Insurance Regulatory and Development Authority Act, 199939 sections
- The Finance Act, 199899 sections
- The Finance Act, 200082 sections
- The Central Road and Infrastructure Fund Act, 200016 sections
- The Finance Act, 2001102 sections
- The Finance Act, 199780 sections
- The Industrial Reconstruction Bank (Transfer of Undertakings and Repeal) Act, 199715 sections
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Every one of the 52 sections of this Act has its own page. This page is not a substitute for legal advice.