Banky’s Understanding: FEMA 1999: Replaced FERA. Effective June 1, 2000. Shifted forex violations from criminal (FERA) to civil offences. Extends to whole India except GIFT City (Gujarat International Finance Tec-City). Empowers Central Govt to impose restrictions. All forex transactions through Authorised Persons only. RBI empowered to regulate capital account transactions.

Banky’s Understanding: Resident = person staying 182+ days in India in preceding FY (exam PYQ! — not 180, 90, or 91). Current account transaction = doesn’t change assets/liabilities outside India. Capital account transaction = alters assets/liabilities outside India. Currency includes: notes, coins, cheques, drafts, TCs, letters of credit, credit cards, debit cards, ATM cards.

Banky’s Understanding: AD Category I: Banks authorised for ALL permissible current and capital account transactions. AD Category II: Non-trade current account transactions + FFMC activities (upgraded FFMCs, select RRBs, select UCBs). AD Category III: Specific forex transactions incidental to their business. Authorised Person (AP): AD, money changer, offshore banking unit, or any other person authorised under Sec 10 of FEMA.

Banky’s Understanding: LRS: USD 250,000 per FY for resident individuals. Covers current account (travel, education, medical, gifts, maintenance of relatives) + capital account (foreign property, investment, foreign bank A/c, JV/WOS). Initially USD 25,000 (exam PYQ!). Subsumes Schedule III limits. No remittance for margins to overseas exchanges. Cannot gift to another resident’s foreign account. Tax: TCS applicable on LRS remittances.

Banky’s Understanding: Prohibited (Schedule I): (1) Remittance of lottery winnings. (2) Income from racing/riding/hobbies. (3) Purchase of lottery/sweepstake tickets. (4) Transactions with Nepal/Bhutan in forex (use INR only — exam PYQ!). (5) Margin calls to overseas exchanges. Schedule II: Require Central Govt approval. Schedule III: AD can permit within limits; beyond limits = RBI approval.

Banky’s Understanding: Currency Declaration Form (CDF): Required when bringing forex into India if: (1) Currency notes + travellers cheques > USD 10,000 equivalent, OR (2) Foreign currency notes alone > USD 5,000 equivalent. No limit on forex amount brought in (just declaration required above threshold). Purchase of forex from public: cash payment up to USD 1,000 (resident) or USD 3,000 (NRI/foreign visitor) per transaction.