FEMA 1999 — Foreign Exchange Transactions Quiz
Case Scenario IV — ABC Infrastructure & Broadcasting Limited (AIBL)
ABC Infrastructure & Broadcasting Limited (AIBL), a Government of India public sector undertaking engaged in infrastructure and satellite television operations, proposed to undertake certain foreign exchange transactions during FY 2025-26.
The company needed to make a remittance of USD 18,000 for an advertisement in a foreign print magazine, being for brand building and not for tourism promotion, foreign investment promotion or international bidding.
The company also needed to pay a consultancy fee of USD 11.5 million to a foreign firm for a highway project in India. It obtained the in-principal approval of the Information & Broadcasting Ministry (Parent Ministry) to make the advertisement and also to pay the consultancy fees.
Mr. Rohan Mehta, a director in AIBL and a resident in India, proposes during FY 2025-26 to remit USD 2,10,000 for his daughter's higher education abroad and USD 70,000 as a gift to his sister residing in Australia. The university where his daughter studies requires a tuition fee payment of USD 1,50,000, the balance of USD 60,000 being for associated education purposes (not required by the institute). He has not made any other remittances during the financial year.
Mr. Rohan Mehta inherited a property situated outside India from his resident father, who in turn inherited from his father. The grandfather of Mr. Rohan Mehta had purchased the foreign property when he was working outside India. Mr. Rohan Mehta seeks advice as to whether the proposed remittances can be made and his inheritance complies with the FEMA regulations.
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