Take This Quiz & Predict Your Score in the coming CA CS or CMA Exam!
  • How important it is for you to pass the exam in this attempt?
  • What percentage of course you have finished well so far roughly?
  • How many hours you study in a day?
  • How many times you have revised the topics you have finished
  • Have you taken online or pen drive or live class from a renowned faculty?
  • What percentage of the classes you have watched?
  • Have you attempted mock tests or practice tests yet?
  • Are you planning to attempt mock tests conducted by external bodies- ICAI, ICSI, ICMAI or other institute?
  • How many tests you have taken?
  • Did you manage to finish the test papers on time?
  • Are you strictly following study material provided by the exam conducting authority such as ICAI/ICSI/ICMAI/Other Body?
  • How is your health in general?
  • How is your food habit?
  • Any interest in yoga or exercise or play sports regularly?
  • Planning to sleep well nights before the exams?
  • Planning to have light food and water before exams?

Current Account Transactions under FEMA Act, 1999

Current Account Transactions under FEMA Act, 1999

Section 5 of the Foreign Exchange Management Act, 1999 contains provisions regarding Current Account Transactions.

Any person may sell or draw foreign exchange to or from an authorized person if such sale or drawal is a current account transaction.

The Central Government may, in public interest and in consultation with the Reserve Bank, impose such reasonable restrictions for current account transactions as may be prescribed.

 Definition of Current Account Transactions

“Current account transaction” means a transaction other than a capital account transaction and without prejudice to the generality of the foregoing such transaction includes,-
(i) Payments due in connection with foreign trade, other current business, services, and short-term banking and credit facilities in the ordinary course of business,

(ii) Payments due as interest on loans and as net income from investments,

(iii) Remittances for living expenses of parents, spouse and children residing abroad, and

(iv) Expenses in connection with foreign travel, education and medical care of parents, spouse and children;

Foreign Exchange Management (Current Account Transactions) Rules, 2000

The prohibitions and restrictions regarding Current Account Transactions are contained in Foreign Exchange Management (Current Account Transactions) Rules, 2000.

Rule 2(b) defines “Drawal” as drawal of foreign exchange from an authorized person and includes opening of Letter of Credit or use of International Credit Card or International Debit Card of ATM Card or any other thing by whatever name called which has the effect of creating foreign exchange liability;

Rule 3 – Prohibition on drawal of foreign exchange

Drawal of foreign exchange by any person for the following purpose is prohibited, namely:-

(a) a transaction specified in the Schedule I; or –

(b) a travel to Nepal and/ or Bhutan; or

(c) a transaction with a person resident in Nepal of Bhutan :

The prohibition in clause (c) may be exempted by Reserve Bank of India subject to such term and conditions as it may consider necessary to stipulate by special or general order.

Rule 4 – Prior approval of Government of India

No person shall draw foreign exchange for a transaction included in the Schedule II without prior approval of the Government of India. This rule shall not apply where the payment is made out of funds held in Resident Foreign Currency (RFC) Account of the remitter.

Rule 5 – Prior approval of Reserve Bank

Every drawal of foreign exchange for transactions included in Schedule III shall be governed as provided therein. This rule shall not apply where the payment is made out of funds held in Resident Foreign Currency (RFC) Account of the remitter.

Rule 6 – Payment from EEFC Account

Nothing contained in rule 4 or rule 5 shall apply to drawal made out of funds held in Exchange Earners’ Foreign Currency (EEFC) account of the remitter.

Notwithstanding anything contained in sub-rule (1), restrictions imposed under rule 4 or rule 5 shall continue to apply where the drawal of foreign exchange from the Exchange Earners Foreign Currency (EEFC) account is for the purpose specified in items 10 and 11 of Schedule II, or item 3, 4, 11, 16 & 17 Schedule III as the case may be.

Rule 7 – Use of International Credit Card while outside India

Nothing contained in rule 5 shall apply to the use of International Credit Card for making payment by a person towards meeting expenses while such person is on a visit outside India.

Current Account Transactions under FEMA Act, 1999



At CAKART you will get everything that you need to be successful in your CA CS CMA exam – India’s best faculty video classes (online or in pen drive) most popular books of best authors (ebooks hard copies) best scanners and all exam related information and notifications.Visit and chat with our counsellors any time. We are happy to help you make successful in your exams.

Click here to download FREE CA CS CMA books.



Leave a comment

Your email address will not be published. Required fields are marked *