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CS Executive · Economic, Commercial and Intellectual Property Laws · Law relating to Foreign Exchange Management

Under Section 1(3) of FEMA, 1999, which statement about the Act's application to overseas branches is correct?

The Act applies to all branches, offices and agencies outside India that are owned or controlled by a person resident in India. Section 1(3) also covers contraventions committed outside India by any person to whom the Act applies, so its reach is not limited to Indian territory.

  1. AIt applies to branches, offices and agencies outside India owned or controlled by a person resident in IndiaCorrect
  2. BIt applies only within the territory of India
  3. CIt applies only to branches of banks outside India
  4. DIt applies only to contraventions committed in India

Explanation

Section 1(3) states the Act applies to all branches, offices and agencies outside India owned or controlled by a person resident in India, and also to contraventions committed outside India by any person to whom the Act applies. Limiting it to India's territory ignores this extension.

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