1. (1) This Act may be called the Foreign Exchange Management Act,
1999.
(2) It extends to the whole of India.
(3) It shall also apply to all branches, offices and agencies
outside India owned or controlled by a person resident in India and
also to any contravention thereunder committed outside India by any
person to whom this Act applies.
(4) It shall come into force on such date as the Central Government
may, by notification in the Official Gazette, appoint:
Provided that different dates may be appointed for different
provisions of this Act and any reference in any such provision to the
commencement of this Act shall be construed as a reference to the
coming into force of that provision.
Definitions
2. In this Act, unless the context otherwise requires,â
(a) "Adjudicating Authority" means an officer authorised
under sub-section (1) of section 16;
(b) "Appellate Tribunal" means the Appellate Tribunal for
Foreign Exchange established under section 18;
(c) "authorised person" means an authorised dealer, money
changer, off-shore banking unit or any other person for the time being
authorised under sub-section (1) of section 10 to deal in foreign
exchange or foreign securities;
(d) "Bench" means a Bench of the Appellate Tribunal;
(e) "capital account transaction" means a transaction
which alters the assets or liabilities, including contingent
liabilities, outside India of persons resident in India or assets or
liabilities in India of persons resident outside India, and includes
transactions referred to in sub-section (3) of section 6;
(f) "Chairperson" means the Chairperson of the Appellate
Tribunal;
(g) "chartered accountant" shall have the meaning assigned
to it in clause (b) of sub-section (1) of section 2 of the
Chartered Accountants Act, 1949 (38 of 1949);
(h) "currency" includes all currency notes, postal notes,
postal orders, money orders, cheques, drafts, travellers cheques,
letters of credit, bills of exchange and promissory notes, credit
cards or such other similar instruments, as may be notified by the
Reserve Bank;
(i) "currency notes" means and includes cash in the form
of coins and bank notes;
(j) "current account transaction" means a transaction
other than a capital account transaction and without prejudice to the
generality of the foregoing such transaction includes:-
(i) payments due in connection with foreign trade, other current
business,services, and short-term banking and credit facilities in the
ordinary course of business,
(ii) payments due as interest on loans and as net income from investments,
(iii) remittances for living expenses of parents, spouse and
children residing abroad, and
(iv) expenses in connection with foreign travel, education and
medical care of parents, spouse and children;
(k) "Director of Enforcement" means the Director of
Enforcement appointed under sub-section (1) of section 36;
(l) "export", with its grammatical variations and cognate
expressions, meansâ
(i) the taking out of India to a place outside India any goods,
(ii) provision of services from India to any person outside India;
(m) "foreign currency" means any currency other than
Indian currency;
(n) "foreign exchange" means foreign currency and
includes,â
(i) deposits, credits and balances payable in any foreign currency,
(ii) drafts, travellers cheques, letters of credit or bills of
exchange, expressed or drawn in Indian currency but payable in any
foreign currency,
(iii) drafts, travellers cheques, letters of credit or bills of
exchange drawn by banks, institutions or persons outside India, but
payable in Indian currency;
(o) "foreign security" means any security, in the form of
shares, stocks, bonds, debentures or any other instrument denominated
or expressed in foreign currency and includes securities expressed in
foreign currency, but where redemption or any form of return such as
interest or dividends is payable in Indian currency;
(p) "import", with its grammatical variations and cognate
expressions, means bringing into India any goods or services;
(q) "Indian currency" means currency which is expressed or
drawn in Indian rupees but does not include special bank notes and
special one rupee notes issued under section 28A of the Reserve Bank
of India Act, 1934 (2 of 1934);
(r) "legal practitioner" shall have the meaning assigned
to it in clause (i) of sub-section (1) of section 2 of the
Advocates Act, 1961 (25 of 1961);
(s) "Member" means a Member of the Appellate Tribunal and
includes the Chairperson thereof;
(t) "notify" means to notify in the Official Gazette and
the expression "notification" shall be construed
accordingly;
(u) "person" includesâ
(i) an individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of individuals, whether
incorporated or not,
(vi) every artificial juridical person, not falling within any of
the preceding sub-clauses, and
(vii) any agency, office or branch owned or controlled by such
person;
(v) "person resident in India" meansâ
(i) a person residing in India for more than one hundred and
eighty-two days during the course of the preceding financial year but
does not includeâ
(A) a person who has gone out of India or who stays outside India,
in either caseâ
(a) for or on taking up employment outside India, or
(b) for carrying on outside India a business or vocation outside
India, or
(c) for any other purpose, in such circumstances as would indicate
his intention to stay outside India for an uncertain period;
(B) a person who has come to or stays in India, in either case,
otherwise thanâ
(a) for or on taking up employment in India, or
(b) for carrying on in India a business or vocation in India, or
(c) for any other purpose, in such circumstances as would indicate
his intention to stay in India for an uncertain period;
(ii) any person or body corporate registered or incorporated in
India,
(iii) an office, branch or agency in India owned or controlled by a
person resident outside India,
(iv) an office, branch or agency outside India owned or controlled
by a person resident in India;
(w) "person resident outside India" means a person who is
not resident in India;
(x) "prescribed" means prescribed by rules made under this
Act;
(y) "repatriate to India" means bringing into India the
realised foreign exchange andâ
(i) the selling of such foreign exchange to an authorised person in
India in exchange for rupees, or
(ii) the holding of realised amount in an account with an authorised
person in India to the extent notified by the Reserve Bank, and
includes use of the realised amount for discharge of a debt or
liability denominated in foreign exchange and the expression "repatriation"
shall be construed accordingly;
(z) "Reserve Bank" means the Reserve Bank of India
constituted under sub-section (1) of section 3 of the Reserve Bank of
India Act, 1934 (2 of 1934);
(za) "security" means shares, stocks, bonds and
debentures, Government securities as defined in the Public Debt Act,
1944 (18 of 1944), savings certificates to which the Government
Savings Certificates Act, 1959 (46 of 1959) applies, deposit receipts
in respect of deposits of securities and units of the Unit Trust of
India established under sub-section (1) of section 3 of the Unit Trust
of India Act, 1963 (52 of 1963) or of any mutual fund and includes
certificates of title to securities, but does not include bills of
exchange or promissory notes other than Government promissory notes or
any other instruments which may be notified by the Reserve Bank as
security for the purposes of this Act;
(zb) "service" means service of any description which is
made available to potential users and includes the provision of
facilities in connection with banking, financing, insurance, medical
assistance, legal assistance, chit fund, real estate, transport,
processing, supply of electrical or other energy, boarding or lodging
or both, entertainment, amusement or the purveying of news or other
information, but does not include the rendering of any service free of
charge or under a contract of personal service;
(zc) "Special Director (Appeals)" means an officer
appointed under section 18;
(zd) "specify" means to specify by regulations made under
this Act and the expression "specified" shall be construed
accordingly;
(ze) "transfer" includes sale, purchase, exchange,
mortgage, pledge, gift, loan or any other form of transfer of right,
title, possession or lien.