What exactly is FERA ?  What is FEMA? A breif explanation for NRIs

Nri's frequently hear the words FERA and FEMA when it comes to dealings the involve India. Here is a brief summarized description of what FERA and FEMA mean. The Foreign Exchange Regulation Act (FERA) is legislation that was passed by the Indian Parliament in 1973 and came into effect as of January 1, 1974. FERA imposed strict regulations on transactions involving foreign exchange and controlled the import and export of currency. Nri's may perhaps remember a period, several years back, when there was a black market for buying and selling foreign currency in India. Eventually the government realized that FERA rules were perhaps a hindrance to economic liberalization. FERA was repealed by the government in 1999 and replaced by the Foreign Exchange Management Act (FEMA), which liberalized foreign exchange controls and removed many restrictions on foreign investment.

What is the Foreign Exchange Management Act

FEMA came into effect on the 1st of June, 2000, replacing the Foreign Exchange Regulation Act (FERA). The intentions of the Foreign Exchange Management Act are to perhaps, revise and unite laws that relate to transactions of foreign exchange and encourage an orderly maintenance and development, of the foreign exchange markets in India. FEMA is not as restrictive as some of the FERA regulations, and in line with India's economic liberalization policies.

Who is considered to be Non-Resident

The notion of Non-Resident under FERA is different as compared to that under Income Tax Act. Under Income Tax Act, the residential status of a person is determined on the basis of the number of days they stay in India. Under FERA, it is the intention of a person to be in India or outside India that is considered, as an important factor in determining their residential status. For example, a person may be India for only a short duration with the intention of employment.

What is Income Tax Act 1961?

The Income tax act 1961, governs the rules and regulations related to taxation in India. Comprehensive information on this act available from 'Department of Revenue, Ministry of Finance' website which can be accessed by visiting at http://www.incometaxindia.gov.in/
Disclaimer: Information provided is for general knowledge only and should not be deemed to be professional advice. For professional advice kindly consult a professional accountant, immigration advisor or the Indian consulate. Rules and regulations do change from time to time. Please note that in case of any variation between what has been stated on this website and the relevant Act, Rules, Regulations, Policy Statements etc. the latter shall prevail. © Copyright 2006 Nriinformation.com
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What exactly is FERA ? 

What is FEMA? A breif

explanation for NRIs

Nri's frequently hear the words FERA and FEMA when it comes to dealings the involve India. Here is a brief summarized description of what FERA and FEMA mean. The Foreign Exchange Regulation Act (FERA) is legislation that was passed by the Indian Parliament in 1973 and came into effect as of January 1, 1974. FERA imposed strict regulations on transactions involving foreign exchange and controlled the import and export of currency. Nri's may perhaps remember a period, several years back, when there was a black market for buying and selling foreign currency in India. Eventually the government realized that FERA rules were perhaps a hindrance to economic liberalization. FERA was repealed by the government in 1999 and replaced by the Foreign Exchange Management Act (FEMA), which liberalized foreign exchange controls and removed many restrictions on foreign investment.

What is the Foreign Exchange

Management Act

FEMA came into effect on the 1st of June, 2000, replacing the Foreign Exchange Regulation Act (FERA). The intentions of the Foreign Exchange Management Act are to perhaps, revise and unite laws that relate to transactions of foreign exchange and encourage an orderly maintenance and development, of the foreign exchange markets in India. FEMA is not as restrictive as some of the FERA regulations, and in line with India's economic liberalization policies.

Who is considered to be Non-

Resident

The notion of Non-Resident under FERA is different as compared to that under Income Tax Act. Under Income Tax Act, the residential status of a person is determined on the basis of the number of days they stay in India. Under FERA, it is the intention of a person to be in India or outside India that is considered, as an important factor in determining their residential status. For example, a person may be India for only a short duration with the intention of employment.

What is Income Tax Act 1961?

The Income tax act 1961, governs the rules and regulations related to taxation in India. Comprehensive information on this act available from 'Department of Revenue, Ministry of Finance' website which can be accessed by visiting at http://www.incometaxindia.gov.in/ Read More on next page   Disadvantages of Acquiring Foreign Citizenship . . .read now 
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