Where the amount involved is quantifiable, the penalty for a contravention under FEMA may extend up to:

The correct answer is C, 1 June 2000. FEMA was passed as Act 42 of 1999 and received the assent of the President on 29 December 1999, but it was brought into force only on 1 June 2000, on which date the Foreign Exchange Regulation Act of 1973 stood repealed. Option A is wrong because 29 December 1999 is the date of the President's assent, and a question that asks for commencement is testing exactly this distinction. Option B is wrong because 1 April 2000 is the beginning of a financial year and has no connection with the Act; it is offered because candidates expect a tax-style date. Option D is wrong because by 1 January 2001 the Act had already been in force for seven months. Remember the pair: assent in 1999, commencement in 2000.

The correct answer is A, Foreign Exchange Regulation Act, 1973. FERA suited an economy short of foreign exchange: it presumed every transaction forbidden unless allowed, made a contravention a criminal offence punishable with imprisonment, and placed the burden of proof on the accused. FEMA repealed it and made contraventions civil and compoundable. Option B is wrong because the Prevention of Money Laundering Act of 2002 came three years after FEMA and runs alongside it, dealing with the criminal offence of laundering the proceeds of crime. Option C is wrong because the Banking Regulation Act of 1949 governs the business of banking and is still in force. Option D is wrong because the COFEPOSA Act of 1974 provides for preventive detention in smuggling cases and was not replaced by FEMA.

The correct answer is B, Directorate of Enforcement. The Directorate of Enforcement, which works under the Department of Revenue in the Ministry of Finance, investigates contraventions of FEMA, conducts searches and places cases before the Adjudicating Authority. Option A is wrong because the Reserve Bank administers the Act, frames the regulations on capital account transactions, authorises authorised persons and compounds many contraventions, but it is not the investigating agency, and the paper distinguishes administration from enforcement. Option C is wrong because the Central Bureau of Investigation handles offences under the general criminal law and corruption cases, not foreign exchange contraventions. Option D is wrong because SEBI regulates the securities market and has no role in administering or enforcing this Act. Section 37A, added later, lets the Directorate seize assets of equivalent value inside India where foreign exchange is held abroad in breach of the Act.

The correct answer is C, 182 days. FEMA defines a person resident in India by a stay of more than one hundred and eighty-two days in the preceding financial year, with exceptions for a person who has gone abroad for employment, for business or for an uncertain period, and for a person who has come to India on those terms. Residence under the Act therefore depends on days present and not on citizenship. Option A is wrong because ninety days appears in other statutes but not in this definition. Option B is wrong because one hundred and twenty days is a threshold found in the residence rules of the Income-tax Act for certain Indian citizens, which is why it is a tempting distractor. Option D is wrong because two hundred and forty days has no place in the FEMA definition at all.

The correct answer is C, USD 2,50,000. Under the Liberalised Remittance Scheme every resident individual, including a minor, may freely remit up to two lakh fifty thousand United States dollars in a financial year running from April to March, for any permitted current or capital account transaction or a combination of the two. The scheme is not available to companies, partnership firms, Hindu undivided families or trusts, and the Permanent Account Number must be quoted. Option A is wrong because twenty-five thousand dollars was the limit when the scheme began in 2004 and has been raised several times since. Option B is wrong because one lakh dollars is one of those intermediate limits and is now out of date. Option D is wrong because ten lakh dollars is the annual ceiling for repatriation from an NRO account, a different rule.