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CMA Final · Corporate and Economic Laws · Foreign Exchange Management Act, 1999

Which of the following is covered by the Explanation's definition of 'financial transaction' for section 3(d) of FEMA?

Acknowledging any debt is a financial transaction under the Explanation to section 3(d). The definition covers making or receiving payments, drawing, issuing or negotiating bills of exchange or promissory notes, transferring securities and acknowledging debt, but not routine compliance acts like filing returns or holding meetings.

  1. AAcknowledging any debtCorrect
  2. BFiling a return of income
  3. CAppointing a company auditor
  4. DHolding a board meeting

Explanation

The Explanation to section 3(d) defines financial transaction as making or receiving any payment, drawing, issuing or negotiating a bill of exchange or promissory note, transferring any security or acknowledging any debt. Filing returns, appointing auditors or holding meetings are not listed.

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