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What is Foreign Exchange Management Act (FEMA)?

April 26, 2017ACT FEMA foreign exchange Management

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What is Foreign Exchange Management Act (FEMA)?

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Ans: Residential status and nature of transaction i.e. capital account transaction (e.g. purchase/ sale of shares, property) or current account transaction (e.g. remittance of income on shares, property) are the cornerstones of FEMA. Under FEMA, certain types of transactions do not require RBI permission while others either require prior approval of RBI/ Government or it is mandatory to inform RBI of the same.