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Fema

The document outlines a test on the Foreign Exchange Management Act (FEMA) 1999, consisting of six questions that cover various aspects of foreign exchange regulations, including remittances, residential status of individuals, definitions of foreign exchange and currency, and restrictions on transactions. It requires candidates to analyze specific scenarios involving individuals and their compliance with FEMA provisions. The test is designed to assess understanding of the rules and regulations governing foreign exchange in India.

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43 views2 pages

Fema

The document outlines a test on the Foreign Exchange Management Act (FEMA) 1999, consisting of six questions that cover various aspects of foreign exchange regulations, including remittances, residential status of individuals, definitions of foreign exchange and currency, and restrictions on transactions. It requires candidates to analyze specific scenarios involving individuals and their compliance with FEMA provisions. The test is designed to assess understanding of the rules and regulations governing foreign exchange in India.

Uploaded by

realshubham.rawat2
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Test – FEMA, 1999

Time – 1 hour
25 marks
Question-1 (4 marks)
Explain the rules relating to the remittances made by persons other than individuals requiring
approval of RBI as provided in Schedule III to the Foreign Exchange Management (Current Account
Transactions) Rules, 2000 issued under the Foreign Exchange Management Act, 1999 in respect of
the following:
(i) Commission to the agents abroad for sale of residential flats or commercial plots in India.
(ii) Remittances for consultancy services procured from outside India.
(iii) Remittances by way of reimbursement of pre-incorporation expenses.

Question- 2 (4 marks)
Mr, L was employed as a fashion designer in Elegant Textile Ltd., a public limited company in
Gurugram, India during the financial year 2023-2024. He had efficiently provided his services for
183 days during the above said period. On 01.04.2024 Mr. H the Human Resource Manager of Jeff
Fashion Ltd., Paris (a foreign country) offered him a better employment opportunity in such
company.
On 02.04.2024, Mr. L left India for taking up employment as a production controller at Jeff Fashion
Ltd. In Paris. On 30.04.2024 he flew back to India for 10 day family function in Manali, India.
In light of the provisions of the Foreign Exchange Management Act,1999 elucidate: The residential
status of Mr. L –
(i) On his return for attending the family function on 30.04.2024.
(ii) In case, instead of vacation, he joins an employment in an Indian company after arriving on
30.04.2024.

Question-3 (4 marks)
Ravi, an Indian citizen, works as a software engineer for an international company. During the previous
financial year (2023-2024), Ravi resided in India for 200 days. However, in April of the current
financial year, he accepted a job offer in Canada and left India with a long-term work visa, planning to
settle in Canada indefinitely.
Analyse the residential status of Ravi for the financial year 2024-2025, as per the provisions of the
Foreign Exchange Management Act, 1999

Question- 4 (4 marks)
Explain the meaning of the following term as per the provisions of Foreign Exchange Management Act,
1999:
(a) Foreign Exchange
(b) Currency

Question- 5 (4 marks)
State whether there are any restrictions in respect of the following transactions:
(i) Drawal of foreign exchange for payments due on account of amortization of loans in ordinary course
of business.
(ii) Purchase by a person resident outside India of shares of a company in India engaged in plantation
activities.
Question- 6 (5 marks)
Examine whether the following transactions are permissible or not under the above Act as Capital
Account transactions:
1. Investment by person resident in India in Foreign Securities.
2. Foreign currency loans raised in India and abroad by a person resident in India.
3. Export, import and holding of currency/currency notes.
4. Trading in transferable development rights.
5. Investment in a Nidhi Company.

BEST OF LUCK!!

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