The exchange control regulations have been liberalised over the years to facilitate the inflow and outflow of funds from India. The changes have been introduced on a continuous basis in line with the government policy of economic liberalisation. Still, in few cases, specific approvals are required from the regulatory authorities for foreign exchange transactions/remittances.
These regulations in India are governed by the Foreign Exchange Management Act (“FEMA”) and the Regulations thereunder. The apex exchange control authority in India is the Reserve Bank of India (RBI) which regulates the law and is responsible for all key approvals.
FEMA is not only applicable to all parts of India but is also applicable to all branches, offices and agencies outside India which are owned or controlled by a person resident in India. It regulates all aspects of foreign exchange and has direct implications on external trade and payments.
FEMA is an important legislation which impacts foreign nationals who are working in India and also Indians who have gone outside India. It is important to be compliant with the exchange control regulations.
Key service offerings:
KPMG in India offers the following services with regard to the payroll functions: