Compounding of contraventions provides a voluntary mechanism to settle admitted FEMA breaches subject to quantification and authority discretion.
Compounding under FEMA is a voluntary statutory mechanism for settlement of admitted, quantifiable contraventions administered mainly by the Reserve Bank of India under Section 15 and the Compounding Rules, 2000; applications must follow prescribed formats with supporting annexes, are subject to CA discretion in assessing compoundability and quantifying sums by reference to factors like unfair gain and loss to the exchequer, and on payment and compliance result in discharge from further proceedings, whereas non payment or serious issues may lead to enforcement referrals.

Remittance facilities for NRIs: banks may permit repatriation and remittance subject to documentation, tax compliance and prescribed limits.
The Master Circular consolidates FEMA-based remittance facilities for NRIs, PIOs and foreign nationals, defining eligible persons and prescribing conditions for repatriation and remittance of current income, salaries and sale proceeds of assets. Authorised Dealer banks must satisfy themselves on tax compliance, obtain prescribed documentary evidence and Chartered Accountant certificates, apply specified per financial year limits for remittances, enforce nationality-based restrictions for certain asset repatriations, permit re-designation of resident accounts to NRO on exit subject to controls, and observe reporting and procedural formats prescribed by tax authorities.

Establishment of foreign liaison, branch and project offices requires RBI approval and compliance with reporting and remittance rules.
Establishment of Liaison, Branch and Project Offices by foreign entities requires Reserve Bank approval under FEMA via Reserve Bank or Government routes, with eligibility based on profit track record and minimum net worth, submission through an AD Category I bank, and allotment of a Unique Identification Number and PAN. LOs may only undertake non revenue liaison functions funded by inward remittances; BOs may carry out specified commercial and service activities but cannot retail trade or manufacture; POs qualify for general permission when supported by specified contract or financing criteria and may maintain restricted foreign currency accounts. All offices face reporting, auditing, extension and closure procedures and other operational conditions.

Liberalised Remittance Scheme enables resident individuals to remit abroad for permitted transactions subject to bank compliance and reporting.
Authorised Dealers may permit outward remittances by resident individuals for specified current and permitted capital transactions under the Foreign Exchange Management Act and Rules, subject to prescribed ceilings, self declaration or documentary requirements, KYC/AML compliance, record retention, refusal/reporting obligations for suspicious transactions, and reporting of remittances (including those under the Liberalised Remittance Scheme) to the Reserve Bank. The Circular also sets rules for sale, surrender and retention of foreign exchange, operation of Resident Foreign Currency accounts, treatment of prepaid and payment cards, and conditions where prior government or Reserve Bank approval is required.

Risk management consolidation directs banks to follow unified FEMA-based rules, with master circular carrying a one-year sunset.
Master Circular consolidates RBI guidance on risk management and inter-bank dealings, covering Foreign Exchange Derivative Contracts, Overseas Commodity & Freight Hedging, Rupee Accounts of Non-Resident Banks and inter-bank foreign exchange dealings under Notification No. FEMA 1/2000-RB, Regulation 4(2) of Notification No. FEMA 3/RB-2000 and Notification No. FEMA 25/RB-2000 and subsequent amendments; lists underlying circulars in an Appendix and is issued with a one-year sunset clause to be replaced by an updated master circular.

Acquisition of immovable property by NRIs and PIOs: rules on permitted purchases, payment channels and repatriation conditions.
The Master Circular consolidates FEMA permissions and restrictions on acquisition and transfer of immovable property by NRIs, PIOs, diplomatic missions and foreign nationals. NRIs and PIOs may purchase non agricultural property and must pay only through prescribed banking channels or specified non resident accounts; purchases under general permission need no Reserve Bank filing. Diplomatic entities require Government clearance; non resident businesses must file Form IPI. Repatriation of sale proceeds is conditional on lawful acquisition, specified source/payment channels and limits, while citizens of certain countries need prior Reserve Bank permission for acquisitions.

Rupee Vostro Account rules require funded drawing arrangements, audit oversight, collateral and strict KYC/AML controls.
This Master Circular consolidates rules for opening and maintaining Rupee Vostro Accounts and foreign currency vostro accounts of non-resident Exchange Houses under Rupee Drawing Arrangements. It prescribes three procedures-DDA, Non DDA and Speed Remittance-setting out funding, verification, audit or deputation requirements, collateral cover based on operating vintage, prohibition of overdrafts and cash disbursements, operational limits on drawee branches, and mandatory KYC/AML/CFT compliance, concurrent audit inclusion and periodic reporting to the Reserve Bank.

Non Resident Rupee account rules permit limited repatriation and specify eligible credits, debits, and documentary requirements.
Regulatory framework for Non-Resident Ordinary Rupee (NRO) Accounts prescribes eligible account types, permissible credits (inward remittances, foreign currency brought into India, transfers from non-resident rupee accounts, India-source income, sale proceeds, gifts/loans from residents within LRS limits) and debits (local rupee payments, remittance of India-source income, remittances for bona fide purposes subject to an overall annual ceiling, transfers to NRE accounts subject to tax). Repatriation of balances and sale proceeds is allowed within overall limits on production of documentary evidence and a Chartered Accountant's certificate; certain nationalities face restrictions and prior RBI permission may be required.

KYC/AML/CFT compliance required for money transfer service scheme participants, imposing eligibility, reporting, due diligence and collateral obligations.
Master Circular consolidates MTSS rules: eligibility and authorisation requirements for Indian Agents, due-diligence and supervisory standards for Overseas Principals, collateral arrangements and remittance/payment limits, mandatory procedures for appointment, monitoring and audit of Sub-Agents, and comprehensive KYC/AML/CFT obligations including customer identification, risk-based due diligence, enhanced measures for PEPs, record-keeping, and timelines/formats for Cash Transaction Reports and Suspicious Transaction Reports to FIU-IND, together with prescribed reporting to the Reserve Bank.

Contract R&D service characterization: factors determining whether development centres bear insignificant risk and TNMM applicability.
Guidance identifies contract R&D service providers with insignificant risk by reference to whether the foreign principal performs economically significant functions (including conceptualization, design and strategic direction), provides funds and economically significant assets and remunerates the Indian centre, actually controls and supervises core activities, and whether the Indian centre lacks ownership rights and does not assume economically significant realized risks; it also presumes a rebuttable absence of risk control where the principal is in a widely perceived low or no tax jurisdiction and directs revenue officers to decide based on conduct and totality of facts while selecting the most appropriate transfer pricing method.

Profit Split Method guidance withdrawn after guidance implied method hierarchy, circular revoked with immediate effect
The issuing authority withdraws a prior circular on the application of the Profit Split Method because it appeared to create a hierarchy among transfer pricing methods and to suggest preference for the Profit Split Method in cases involving unique intangibles or multiple interrelated international transactions; the circular is withdrawn with immediate effect and stakeholders are to be informed.

Deputation appointment for Console Operator posts: applications required with service eligibility, qualifications, and mandatory clearances.
Seven Console Operator posts are to be filled on deputation/absorption with pay regulated under DoPT rules; eligibility requires holding analogous posts or prescribed service in specified pay scales plus essential qualifications in statistics, mathematics, engineering or computer science and experience in electronic data processing and programming. Deputation normally not to exceed three years and a maximum age for appointment by deputation/absorption is prescribed. Applications in triplicate must include the prescribed proforma, five years' ACRs, vigilance clearance and integrity certificate forwarded through proper channel within the stipulated period.

Electoral Trust name availability permitted for section 25 companies, subject to formation compliance and affidavit requirements.
Use of the phrase Electoral Trust is permitted in proposed company names for companies to be formed under section 25 of the Companies Act, 1956 under the Electoral Trusts Scheme, 2013. Such companies must be newly formed and comply with section 293-A, and the name application may be accompanied by an affidavit that the name is sought solely for registration under the CBDT-notified scheme.

Constituent-material classification directs filter elements to be classified by material, not under the filter machinery heading.
The circular directs that elements of filters must be classified according to their constituent material rather than automatically as parts of filtering machinery; paper-based elements are classifiable in paper headings, textile technical elements in textile headings, glass or ceramic elements in their respective material headings, while the filters themselves remain within the filter machinery heading.

Import restrictions on gold: cash margin and documents against payment required, with limited loan based imports for eligible jewellery exporters.
Nominated banks, agencies and permitted trading houses may import gold only to meet genuine needs of gold jewellery exporters; Letters of Credit for such imports must have a 100 per cent cash margin and imports must be on Documents against Payment (DP) basis. Imports on DA or enabled by suppliers'/buyers' credit or on unfixed price terms must comply with the cash margin and DP discipline. Loan basis imports remain permitted solely for on lending to exporters of jewellery. AD Category I banks must ensure compliance and these directions are effective immediately.

FII Hedging Mandate: Banks must obtain sub account holder mandate and verify forward cover against market value.
Authorised Dealer Category I banks must verify periodically that forward cover outstanding for FIIs is backed by corresponding underlying exposures. If an FII hedges a sub account holder's exposure, the bank must obtain and verify a clear written mandate from the sub account holder and confirm the contract's eligibility by reference to the market value of securities in that sub account.

External commercial borrowings: eligible non-residents may provide credit enhancement for INR bonds; maturity reduced to three years.
Eligible non-resident entities may provide credit enhancement for INR-denominated bonds and debentures issued under the automatic ECB route by all borrowers eligible to raise ECBs automatically. Minimum average maturity for such instruments is reduced to three years, with prepayment and call/put options prohibited up to that period. If a guarantor meets the liability and foreign-currency repayment to the non-resident is permissible, prevailing all-in-cost ceilings for the relevant Trade Credit/ECB maturity will apply to the novated loan.

External Commercial Borrowings end-use expansion permits import of services and license fees subject to documentation and bank due diligence
Policy now treats import of services, technical know how and license fees as part of import of capital goods for manufacturing and infrastructure companies, permitted under the automatic or approval route provided there is a signed agreement, original invoice certified by the borrower, declarations that the expenditure will be capitalised and forms part of project cost, and that the AD Category I bank ensures the bonafides; other ECB conditions remain unchanged.

Project export filing deadline extended for post award approval, easing time to submit DPX1, PEX 1 and TCS 1.
Exporters undertaking Project Exports and service contracts must submit forms DPX1, PEX 1 and TCS 1 to the Approving Authority (Authorised Dealer/Exim Bank/Working Group) within thirty days of entering into the contract for post award approval; all other provisions of the PEM remain unchanged and the Directions are issued under the Foreign Exchange Management Act, 1999.

ECB in Renminbi scheme discontinued; authorized banks must notify constituents with immediate effect under foreign exchange authority.
The scheme permitting External Commercial Borrowings in Renminbi for infrastructure-sector Indian companies under an approval route and subject to an annual cap is discontinued from the date of the circular; AD Category I banks must notify their constituents and customers. The directions are issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 and are without prejudice to other legal permissions.