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FEMA & Black Money Act
NRIs returning to India, families with foreign assets, and HNIs facing RBI compounding proceedings need FEMA and Black Money Act defence run by counsel who understand both the Indian and the cross-border tax landscapes. LawCrust coordinates premium representation before the Enforcement Directorate (FEMA wing), the Adjudicating Authority, and the RBI Compounding Authority.
Background
What FEMA and Black Money Act defence covers
The Foreign Exchange Management Act 1999 governs all cross-border transactions involving Indian residents and NRIs. Violations attract penalties up to three times the sum involved (Section 13). The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015 covers foreign assets and income not disclosed to Indian tax authorities, penalties run to 120% of the value plus prosecution. Defence work covers compounding applications (FEMA), voluntary disclosure (Black Money Act), adjudication, appeals, and writ petitions challenging procedural lapses.
What We Handle
Scope of Work
- ▸ FEMA contravention defence, RBI Compounding Authority representations
- ▸ Adjudicating Authority and FEMA Appellate Tribunal proceedings
- ▸ Black Money Act notices, voluntary disclosure under Section 59
- ▸ Foreign-asset disclosure for NRIs returning to India
- ▸ Section 5 LRS violations and RBI master-direction compliance
- ▸ Repatriation challenges (NRE/NRO/FCNR account issues)
- ▸ Property purchases in violation of FEMA, regularisation routes
- ▸ Coordination with foreign counsel for source-of-funds and parallel tax matters
Who It's For
NRIs with Indian assets, returning Indians, HNI individuals with undisclosed foreign holdings, and businesspeople facing FEMA contravention notices, RBI inquiries, or Black Money Act proceedings.
How It Works
A Four-Step Path to Clarity
- 01Scope call
Initial call to identify the contravention, the assets, the source of funds, and the applicable statute (FEMA, Black Money Act, LRS).
- 02Compliance map & disclosure memo
Written memo within 5 working days with the compliance map, voluntary-disclosure options, and indicative penalty exposure.
- 03Filing & RBI engagement
Compounding application or voluntary disclosure filed, RBI / IT engagement managed end-to-end.
- 04Closure & ongoing compliance
Matter closed with order from the appropriate authority; ongoing FEMA / LRS compliance calendar set up where the client has continuing cross-border activity.
Representative Matters
Work We Have Handled in FEMA & Black Money Act
Anonymised practice descriptions. Client identities, matter values, and venues are withheld for confidentiality, per BCI guidelines.
- 01
Filed a compounding application for an NRI couple who purchased agricultural land in violation of FEMA; matter compounded with nominal penalty.
- 02
Represented an HNI Indian resident with undisclosed Swiss bank accounts under the Black Money Act; voluntary disclosure with reduced penalty under the active scheme.
- 03
Acted in an FEMA Appellate Tribunal appeal challenging an adjudication order for inbound investment violations; matter remanded for fresh consideration.
Cross-Border Matters, India Jurisdiction
FEMA and Black Money Act proceedings are entirely Indian-jurisdiction (Indian Adjudicating Authority, FEMA Tribunal, Indian tax department). LawCrust handles all of it. Foreign-bank account documentation, source-country tax history, and inheritance paperwork are coordinated with your foreign-jurisdiction counsel or accountants.
In Their Words
What Clients Say About FEMA & Black Money Act
"They compounded a 4-year-old FEMA contravention on a Dubai property purchase for under ₹1 lakh penalty when we expected lakhs. Clean closure, no further questions from RBI."
"Returning to India after 18 years in the US. They mapped every account, filed disclosures, set up RFC accounts. Felt like a concierge for the whole tax-residence transition."
"Black Money Act notice for an inheritance I genuinely did not know I had to declare. They negotiated penalty to 30% of what was claimed initially. Saved a multi-crore liability."
Reviews shown are anonymised at the client's request, identifiers, matter values, and outcomes are withheld for confidentiality per BCI guidelines and our privilege obligations.
Common Questions
FEMA & Black Money Act, Asked & Answered
I am an NRI and I made an Indian property purchase without proper FEMA reporting. What do I do?
File a compounding application before the RBI Compounding Authority under Section 15 of FEMA. The application discloses the contravention, the circumstances, and seeks a one-time penalty (typically a small multiple of the contravened sum) in lieu of full adjudication. Compounding closes the matter. LawCrust drafts the compounding application, attends the personal hearing, and coordinates the RBI process end-to-end.
I have foreign assets I did not declare to Indian tax. The Black Money Act applies to me, what now?
Voluntary disclosure under Section 59 of the Black Money Act 2015 (where the scheme is active) offers reduced penalty and prosecution immunity. Outside the window, the standard route is to engage with the Income Tax Department directly, settle the assessment, and pay tax + penalty under the Black Money Act framework. Prosecution under Section 50 of the Act is a serious risk; counsel-led disclosure is the only safe approach.
What is the difference between FEMA contravention and PMLA money-laundering?
FEMA contraventions are civil, penalties only, no arrest. PMLA covers proceeds of crime from a predicate offence and is criminal, with arrest, attachment, and trial. The ED prosecutes under both, but the procedures and consequences differ sharply. A FEMA matter can escalate to PMLA if the source of funds is a predicate offence under the PMLA Schedule.
I am returning to India after 20 years abroad. How do I clean up my old FEMA non-compliance?
A returning Indian (RI) faces a unique compliance window: under FEMA, residential status changes once you stay in India for more than 182 days, and you must transfer foreign-currency assets to RFC accounts or report under LRS. Pre-arrival compounding for any past contraventions is the cleanest path. We map your asset profile, file the necessary compounding/disclosure applications, and set up the post-return RFC + DTAA structures.
My LRS remittance was used to buy property in Dubai. Is that compliant?
Yes, under the Liberalised Remittance Scheme (LRS), an Indian resident can remit up to USD 250,000 per financial year for permitted capital-account transactions, which includes residential property abroad. The transaction must be reported in your tax return (Schedule FA), and any rental income attracts Indian tax (subject to DTAA relief). Failure to disclose triggers Black Money Act liability, the disclosure piece is non-negotiable.
I inherited foreign assets. Do I have to declare them in India?
Yes if you are an Indian resident (Section 6 IT Act). All foreign-situs assets (bank accounts, property, securities) must be disclosed in Schedule FA of the income tax return, regardless of whether income is generated. Inherited foreign assets are exempt from gift tax under Section 56, but the foreign-asset disclosure rule still applies. NRIs are exempt from the disclosure requirement (they are non-residents), but the moment residential status changes, the rule kicks in.
Speak With Counsel
Discuss Your FEMA & Black Money Act Matter
Share a few details. A member of our team responds within one business day with a written next-step plan. The first call is nominal and confidential.
- ✓ Response within one business day, no IVR, no gatekeepers.
- ✓ Confidential. Information shared here is covered by professional privilege.
- ✓ India-side counsel for NRIs, available in US, UK, Gulf, APAC time zones.
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