Foreign Exchange Management Act 1999 SPOM Question for Set A Law 30 Most Important Question for Last Day Revision
Important Question
| Sr No. | Questions | Answers |
| 1 | P&I club threshold limit exceeded – Permission from which authority? | Ministry of Finance (Insurance Division) |
| 2 | Container Detention Charges exceeded – Permission from which authority? | Ministry of Surface Transport (Director General of Shipping) |
| 3 | Time taken by AA to dispose complaint from the date of receipt | within 1 year |
| 4 | Mr. Narayana, residing in Australia, wants to purchase a duplex house in India and transferred the required amount to a partnership firm to facilitate the purchase. | Mr. Narayana must obtain prior approval from the Reserve Bank of India (RBI) for transferring funds to a partnership firm. |
| 5 | Limit for LRS+CAT | $2,50,000 |
| 6 | Mr. X, a non-resident residing in America, purchased properties in America. He has now come to India and wants to settle here. He intends to sell the properties in America and invest the proceeds in foreign securities. | Mr. X must obtain permission from the Reserve Bank of India (RBI) for repatriating the sale proceeds and investing in foreign securities |
| 7 | Time limit of returning unused forex to Government | upto $2000: No time limit above $2000: 180 days |
| 8 | John, a foreign national, has come to India on a work visa for a job with a multinational company. He earns a monthly salary of USD 3,000. During his stay, John wishes to remit a portion of his earnings back to his home country to support his family. He wants to ensure that the remittance does not exceed the regulatory limits set by the Foreign Exchange Management Act (FEMA) without requiring special permissions. For the purpose of this case study, the exchange rate is 1 USD = 81.3333 INR. | John to remit his salary without requiring special permission, the maximum amount is set at INR 244,000. & Since INR 243,990 is slightly below the limit of INR 244,000, John can remit his entire monthly salary of USD 3,000 without requiring special permission from the authorities. |
| 9 | Commission to agent O/s india for sale of residential plot in India | 5% or $25000 |
| 10 | ABC Ltd. is planning to pay a commission to an agent abroad for facilitating an export transaction What is the maximum commission ABC Ltd. can pay if the inward remittance is USD 10,00,000? | USD 50,000 |
| 11 | Whether an Indian company can purchase residential property abroad and whether the indian company can purchase office abroad? If yes, then with /without permission of RBI. | Yes, without permission of RBI |
| 12 | Donation of Rs. 10 lakh by a person working abroad from his own personal savings to his college in india in which he has studied, in the college alumini | If he has indian citizenship (NRI) then not considered as FC otherwise treat as FC |
| 13 | Case Study:ABC Ltd. has earned a commission from the sale of real estate property to a foreign entity. Question:Is the commission earned from the sale of real estate to a foreign entity subject to FEMA regulations? | Yes |
| 14 | A person resident outside India wishes to invest in real estate in India. What are the limits and prior approvals required as per FEMA regulations? | Prior approval from the Reserve Bank of India (RBI) |
| 15 | Can PRI invest in foreign company whose biz is real estate of construction & leasing residential complex | Prohibited. Require prior permission of RBI |
| 16 | 1) MAMP of ECB raised by manufacturing Co for working Capital purpose of USD 55 million | Normally: 3 years Manufacturing Co less than $50M : 1 year Taken for WC purpose: 10 year So, MAMP = 10 years |
| 17 | 3) whether ruppee ECB used for repayment of loan taken in India | Permitted but refinancing not allowed |
| 18 | 4) Whether ECB permitted for buying land or engaging in real estate activities in India? If permitted, what is the Minimum Average Maturity Period (MAMP)? | ECB is not permitted for buying land or real estate activities. |
| 19 | 2) eligible amt of ECB loan | $750M |
| 20 | Mr. X sent through authorised dealer $2,80,000 to his daughter for study. College fee is $1,00,000 w/o approval under LRS scheme. Did Mr. X contravene $250000 FEMA rule, if yes then penalty? | Yes & penalty up to three times the sum involved in contravention, where such amount is up to Rs. 2,00,000 Penalty: ₹2,00,000 |
| 21 | Domestic company purchase commercial or residencial building required permission of whom? | RBI |
| 22 | MAMP for ECB raised upto 300 crore for the purchase of P&M? | 7 years |
| 23 | Estimated foreign education fee- $200000 Send for personal expense – $60000 Need to guide the sender the limits under FEMA, 1999 under Schedule 3 | invalid as , limit under Schedule 3 funder LRS is _ 250000 and and hence contravention of act and penalty ₹200000 |
| 24 | Whether Foreign Office controlled by PRI is PRI/PROI or Mr. Harsh, residing in India, established ABC Limited and later opened a branch in Australia named AUS for warehousing purposes, controlled by him. What is the residential status of AUS? | PRI |
| 25 | Whether foreign citizen & Indian citizen can purchase residential house in abroad without permission of RBI if they both are non residents? | Yes |
| 26 | ODI to be made from which channel? | Bank and Financial Institutions |
| 27 | 5) What exchange rate to be used to convert FCY ECB into INR ECB | at rate prevailing on date of agreement for such change or at a rate less (not more) than that prevailing rate if agreed by lender |
| 28 | Aprroval from which ministry req in case of remitance of prize money/sponsorship | Human Resources Department (Department of Youth Affairs & Sports) |
| 29 | A person has come to India for a job. As per FEMA regulations, what is the maximum amount he can export without permission? | INR 2,50,000 |
| 30 | While importing any product, what is the maximum time limit for making payment without interest? . | 3 years. |
| 31 | Sponsorship of Sports activity limit and approval | $100000 – Human Resources Department (Department of Youth Affairs & Sports) |
| 32 | XYZ Ltd. has contravened the foreign exchange limit by making a payment of USD 3 lakhs without proper authorization under FEMA. Question: What is the penalty for contravention of the foreign exchange limit under FEMA? | penalty up to three times the sum involved in contravention, where such amount is up to Rs. 2,00,000 Penalty: ₹2,00,000 |
