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.
TaxByKK · Laws by Sector · taxbykk.comIndex as on 1st June, 2026
Index of provisions · 7 chapters, 52 sections
Chapter I Preliminary2 sections
Chapter II Regulation and Management of Foreign Exchange7 sections
Chapter III Authorised Person3 sections
Chapter IV Contravention and Penalties4 sections
Chapter V Adjudication and Appeal20 sections
- 16Appointment of Adjudicating Authority
- 17Appeal to Special Director (Appeals)
- 18Appellate Tribunal
- 19Appeal to Appellate Tribunal
- 20[Omitted]
- 21Qualifications, for appointment of Special Director (Appeals)
- 22[Omitted]
- 23Terms and conditions of service Special Director (Appeals)
- 24[Omitted]
- 25[Omitted]
- 26[Omitted]
- 27Staff of Special Director (Appeals)
- 28Procedure and powers of Appellate Tribunal and Special Director (Appeals)
- 29[Omitted]
- 30[Omitted]
- 31[Omitted]
- 32Right of appellant to take assistance of legal practitioner or chartered accountant and of Government, to appoint presenting officers
- 33Officers and employees, etc., to be public servant
- 34Civil court not to have jurisdiction
- 35Appeal to High Court
Chapter VI Directorate of Enforcement4 sections
Chapter VII Miscellaneous12 sections
- 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
About this Act
The Foreign Exchange Management Act, 1999 (FEMA) governs dealings in foreign exchange and foreign securities, with the stated aim of facilitating external trade and payments and developing an orderly foreign exchange market in India. It replaced the Foreign Exchange Regulation Act, 1973.
The Reserve Bank of India regulates transactions through authorised persons and makes regulations under section 47, while the Central Government makes rules under section 46. Contraventions attract civil penalties, and the Directorate of Enforcement (Chapter VI) has powers of search and seizure.
The Act has seven chapters: preliminary, regulation of foreign exchange, authorised persons, contraventions and penalties, adjudication and appeal, the Directorate of Enforcement and miscellaneous provisions.
Who it applies to
- Persons resident in India dealing in foreign exchange, foreign securities or property outside India
- Persons resident outside India investing or doing business in India
- Exporters of goods and services, for realisation and repatriation of export proceeds
- Authorised dealers, money changers and other authorised persons
- Companies and their officers, under the provision on contraventions by companies (section 42)
Good to know
- Key chapters
- Chapter II (sections 3 to 9) on current and capital account transactions and exports, and Chapter IV (sections 13 to 15) on penalties and compounding.
- Amended by
- The Finance Acts of 2015 and 2016 and the International Financial Services Centres Authority Act, 2019, which added section 44A.
Frequently asked questions
Which section deals with current account transactions?
Section 5.
Where are capital account transactions governed?
Section 6.
Which section prescribes penalties for contravention of FEMA?
Section 13; compounding of contraventions is under section 15.
Which section covers assets held outside India in contravention of the Act?
Section 37A.
Is there an appeal to the High Court under FEMA?
Yes. Section 35 provides for appeals to the High Court from orders of the Appellate Tribunal.