International Tax
FEMA (Foreign Exchange Management Act)
Indian law governing foreign exchange transactions, cross-border investments and NRI account operations.
Full Definition
Foreign Exchange Management Act (FEMA), 1999 regulates all cross-border foreign exchange transactions in India. Key areas: NRI/foreign investment in India, overseas remittances by residents, NRI bank accounts (NRE/NRO), property transactions by NRIs, and external commercial borrowings. FEMA is enforced by the Reserve Bank of India (RBI). Violations attract compounding penalties. Key forms: Form A2 (outward remittance), Form 15CA/CB (inward/outward remittances above ₹10L), FC-TRS (transfer of shares), and ODI forms.
More International Tax terms
NRI (Non-Resident Indian)
An Indian citizen residing outside India for more than 182 days in a financial year.
RNOR (Resident But Not Ordinarily Resident)
A transitional residency status for individuals who have recently returned to India after being NRIs.
DTAA (Double Taxation Avoidance Agreement)
Bilateral treaty between India and another country preventing the same income from being taxed twice.
LRS (Liberalised Remittance Scheme)
RBI scheme allowing resident individuals to remit up to USD 250,000 per year abroad for permitted purposes.
NRE Account (Non-Resident External)
Bank account in India for NRIs holding foreign earnings converted to INR — interest is tax-free.