Key takeaway
FEMA is a civil law: most contraventions lead to monetary penalties, not imprisonment. Take the notice seriously, reply within time with documents, and consider compounding with the RBI where it is available.
Who may contact you
- Your bank — for missing filings, account redesignation or KYC on NRE/NRO accounts.
- The RBI — on reporting delays or for compounding.
- The Enforcement Directorate — through summons or a show-cause notice for adjudication.
Common contraventions
- Keeping resident accounts after becoming an NRI.
- Buying agricultural land as an NRI or OCI.
- Late reporting of foreign investment in an Indian company.
- Remittances outside permitted limits.
Your options
- Regularise — complete pending filings and correct the position.
- Compound — apply to the RBI under Section 15 of FEMA; you pay a compounding amount and proceedings end.
- Contest — reply to the show-cause notice and attend the adjudication hearing.
- Appeal — against an adjudication order to the appellate authorities under FEMA within the time allowed.
Step by step
- Read the notice and note the deadline.
- Collect passports, bank statements, investment and property records.
- Prepare a chronology showing your residential status over time.
- Reply or apply for compounding with supporting documents.
- Attend hearings, often through an authorised representative.
Penalties
Section 13 of FEMA provides monetary penalties linked to the amount involved. Voluntary disclosure and prompt correction usually help.
Frequently asked questions
Will I be arrested for a FEMA contravention?
FEMA itself is civil, though related laws such as money-laundering laws are separate.
Can I compound without a notice?
Yes, you can apply voluntarily in many cases.
Can a representative handle it?
Yes, a lawyer or chartered accountant can act for you.
Related LegalCops services
References
- Foreign Exchange Management Act, 1999 — Sections 13, 15, 16
- RBI directions on compounding of contraventions
Last reviewed: November 2026.
The information provided is for general educational purposes only and does not constitute legal advice. Applicable laws and procedures may vary depending on the facts, jurisdiction, and circumstances of each matter. Consult a qualified legal professional before taking action.
