Wednesday , February 11, 2026 |   18:11:49 IST
INTL TAXATION INTL MISC TP FDI LIBRARY VISA BIPA NRI
About Us Contact Us Newsletters
 
NEWS FLASH
 
DTAA - Sale of software not taxable as royalty, where once core software transaction is not taxable, then related & inseparable services cannot independently be treated as Fees for Technical Services: ITAT (See Breaking News) TP - After omission of clause (i) of section 92BA vide Finance Act, 2017, expenditure transactions covered u/s 40A(2), including interest payments to related parties, ceased to be specified domestic transactions: ITAT (See Breaking News) Real Household income stagnates in G7 area in Q3 (See Brief) OECD inflation stable at 3.7% in Dec month in 2025 (See Brief) TP - Mechanical exclusion of comparables by merely relying on coordinate bench decisions, without undertaking a proper FAR analysis or recording reasons on functional dissimilarity, is unsustainable: ITAT (See Breaking News) I-T - Notice for re-assessment u/s 148 for Assessment Year 2015-16, is invalid and barred by limitation if it was issued on or after April 1, 2021: ITAT (See Breaking News) TP - As per Sec 153(4), where reference u/s 92CA was made to TPO, then time limit stands extended by another 12 months: ITAT (See Breaking News) DTAA - Receipts from bandwidth services cannot be taxed as royalty as per section 9(1)(vi) or Article 12(3) of the India-Singapore DTAA: ITAT (See Breaking News) TP - If company's financials show predominantly software development service income and it satisfies all quantitative filters, denial of inclusion merely because it provides ancillary support services is not justified: ITAT (See Breaking News) TP - ALP for benchmarking electricity transactions should include gross rate charged by State Electricity Authority, which includes mandatory charges such as demand and penal charges: ITAT (See Breaking News) DTAA - Provisions of the DTAA are not triggered by DDT paid by a domestic company u/s 115-O: ITAT (See Breaking News) I-T - Proviso to Sec 149 provides that up to A.Y 2021-22 (period before amendment), period of limitation as prescribed in erstwhile provisions of Section 149(1)(b) would be applicable: ITAT (See Breaking News) I-T - Income from distribution of standardized software products by distributor, who does not own intellectual property, cannot be characterized as FTS: ITAT (See Breaking News) I-T - If international transactions between parties relating to non-exclusive distributorship and sale of software, were found to be at arm's length, no further attribution of profit can be made to PE: ITAT (See Breaking News) INTL - Interest paid u/s 201(1A) for delayed deposit of TDS is not compensatory in nature & does not qualify as allowable business expenditure u/s 37(1): ITAT (See Breaking News) INTL - Disallowance u/s 40(a)(i) sustainable where assessee paid a substantial sum to an international consultant, thereby creating an employer-employee relationship attracting TDS u/s 192: ITAT (See Breaking News) I-T - Procedure u/s 144C(1) has to be followed by Assessing Officer only if he proposes to make any variation which is prejudicial to interest of eligible assessee: ITAT (See Breaking News)
 
TII SEARCH
 
 
   
Home >>
 

Compounding of Contraventions under FEMA, 1999
By TII News Services
Nov 17, 2020 , New Delhi

    

A.P. (DIR Series)

CIRCULAR NO

06/Dated: November 17, 2020

To,

All Category-I Authorised Dealer Banks

Foreign Exchange Management Act, 1999 (FEMA)-Compounding of Contraventions under FEMA, 1999

The attention of Authorized Dealer Category-I (AD Category-I) banks is invited to paragraph 3 of the Master Direction on "Compounding of Contraventions under FEMA, 1999", in terms of which the powers to compound certain contraventions of Notifications FEMA 20/2000-RB dated May 3, 2000 and FEMA 20(R)/2017-RB dated November 07, 2017 have been delegated to the Regional Offices/Sub-Offices of the Reserve Bank for enhanced customer service and operational convenience. The Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 and Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 i.e. Notification No. FEMA.395/2019-RB, both notified on October 17, 2019, by Government of India and Reserve Bank of India respectively have since superseded the earlier Notification No. FEMA 20(R)/2017-RB. Accordingly, the compounding powers stand delegated to the Regional Offices/ Sub Offices of the Reserve Bank to compound the following contraventions.

FEM (Non -Debt Instruments) Rules, 2019 dated October 17, 2019
Rule 2(k) read with Rule 5
Rule 21
Paragraph 3 (b) of Schedule I (Issue of shares without approval of RBI or Government, wherever required)
Rule 4 (Receiving investment in India from non-resident or taking on record transfer of shares by Investee Company)
Rule 9(4) and Rule 13(3)

 

FEM (Mode of Payment and Reporting of Non-Debt Instruments) Regulations dated October 17, 2019
Regulation 3.1(I)(A)
Regulation 4(1)
Regulation 4(2)
Regulation 4(3)
Regulation 4(6)
Regulation 4(7)
Regulation 4(11)

2. Please refer to para 3.5 of A.P. (DIR Series) Circular No. 56 dated June 28, 2010 and para 2 of A.P. (DIR Series) Circular No.11 dated July 31, 2012 with respect to the classification of a contravention under FEMA by the Reserve Bank as 'technical' or 'material' or 'sensitive/serious in nature'. On a review it has been decided to discontinue the classification of a contravention as 'technical' that was dealt with by way of an administrative/ cautionary advice and regularize such contraventions by imposing minimal compounding amount as per the compounding matrix as contained in the 'Master Direction - Compounding of Contraventions under FEMA, 1999' dated January 01, 2016, as amended from time to time.

3. Please refer to para 3(I) of A.P. (DIR Series) Circular No.73 dated May 26, 2016 with respect to public disclosure of Compounding Orders. On a review and in partial modification of earlier instructions it has been decided that in respect of the Compounding Orders passed on or after March 01, 2020 a summary information, instead of the Compounding Orders, shall be published on the Bank's website in the following format:

Sr. No.
Name of the Applicant
Details of contraventions (provisions of the Act/Regulation/Rules compounded)
Date of compounding order
Amount imposed for compounding of contraventions

4. The aforesaid Master Direction No. 4 dated January 01, 2016, as amended from time to time, is being updated to reflect the changes. AD Category - I banks should bring the contents of this circular to the notice of their constituents and customers concerned.

5. The directions contained in this circular have been issued under section 10(4) and 11(2) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

[RBI/2020-21/67]

Ajay Kumar Misra
Chief General Manager-in-Charge

 
 
INTL TAXATION INTL MISC TP FDI LIBRARY VISA BIPA NRI TII
  • DTAA
  • Circulars (I-T Act, 1922)
  • Limited Treaties
  • Other Treaties
  • TIEAs
  • Notifications
  • Circulars
  • Relevant Sections of I-T Rules,1962
  • Instructions
  • Administrative Orders
  • DRP Panel
  • I-T Act, 1961
  • MLI
  • Relevant Portion of I-T Act,1922
  • GAAR
  • MAP
  • OECD Conventions
  • Draft Guidelines
  • DTC Bill
  • Committee Reports
  • FATCA
  • Intl-Taxation
  • Finance Acts
  • Manual on EoI
  • UN Model Taxation
  • Miscellaneous
  • Cost Inflation Index
  • Union Budget
  • Information Security Guidelines
  • APA Annual Report
  • APA Rules
  • Miscellaneous
  • Relevant Sections of Act
  • Instructions
  • Circulars
  • Notifications
  • Draft Notifications
  • Forms
  • TP Rules
  • APA FAQ
  • UN Manual on TP
  • Safe Harbour Rules
  • US Transfer Pricing
  • FEMA Act
  • Exchange Manual
  • Fema Notifications
  • Master Circulars
  • Press Notes
  • Rules
  • FDI Circulars
  • RBI Circulars
  • Reports
  • FDI Approved
  • RBI Other Notifications
  • FIPB Review
  • FEO Act
  • INTELLECTUAL PROPERTY
  • CBR Act
  • NBFC Report
  • Black Money Act
  • PMLA Instruction
  • PMLA Bill
  • FM Budget Speeches
  • Multimodal Transportation
  • Vienna Convention
  • EXIM Bank LoC
  • Manufacturing Policy
  • FTDR Act, 1992
  • White Paper on Black Money
  • Posting Policy
  • PMLA Cases
  • Transfer of Property
  • MCA Circular
  • Limitation Act
  • Type of Visa
  • SSAs
  • EPFO
  • Acts
  • FAQs
  • Rules
  • Guidelines
  • Tourist Visa
  • Notifications
  • Arbitration
  • Model Text
  • Agreements
  • Relevant Portion of I-T Act
  • I-T Rules, 1962
  • Circulars
  • MISC
  • Notification
  • About Us
  • Contact Us
  •  
     
    A Taxindiaonline Website. Copyright © 2010-2025 | Privacy Policy | Taxindiainternational.com Pvt. Ltd. OPC All rights reserved.