In news: Actor Vijay Devarakonda appeared before Enforcement Directorate in connection with the Foreign Exchange Management Act (FEMA) investigation for producing the recent multilingual movie, ‘Liger’ which had a cameo by boxing legend Mike Tyson.
Foreign Exchange Management Act (FEMA)
- It is an act of Parliament of India
- Introduced in 1999 to replace the draconian FERA (Foreign Exchange Regulation Act).
- FEMA outlines the formalities and procedures for the dealings of all foreign exchange transactions in India.
- These foreign exchange transactions have been classified into two categories — Capital Account Transactions and Current Account Transactions.
- This act makes offences related to foreign exchange civil offenses.
- It also paved the way for the introduction of the Prevention of Money Laundering Act 2002.
- Principles – all current account transactions are permitted unless expressly prohibited and all Capital account transactions are prohibited unless expressly permitted.
- To give effect to the provisions of the Act the Government of India have made Foreign Exchange Management (Current Account transactions) Rules 2000 under Section 5 read with Section 46 of the Act.
- to facilitate external trade and payments
- to assist orderly development and maintenance of the Indian forex market
- to liberalise the Indian economy
Previous Year Questions
Q.1) With reference to the ‘Prohibition of Benami Property Transactions Act, 1988 (PBPT Act), consider the following statements: (2017)
- A property transaction is not treated as a benami transaction if the owner of the property is not aware of the transaction.
- Properties held benami are liable for confiscation by the Government.
- The Act provides for three authorities for investigations but does not provide for any appellate mechanism.
Which of the statements .given above is/are correct?
- 2 only
- 1 and 3 only
- 2 and 3 only