Section 15 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 15 lets a person who has committed a contravention under section 13 apply to have it compounded, that is, settled on terms, instead of going through adjudication. The Act itself says very little: who may compound, the 180-day period, the effect of compounding, and that the manner is to be prescribed by rules. It prints no compounding amount, no fee and no form, and this article states none.
Any contravention under section 13 may, on an application made by the person committing it, be compounded within one hundred and eighty days from the date of receipt of the application by the Director of Enforcement or by such other officers of the Directorate of Enforcement and officers of the Reserve Bank as the Central Government authorises, in such manner as may be prescribed. Once compounded, no proceeding or further proceeding may be initiated or continued against that person under that section for the contravention compounded. Section 37A(6) says section 15 does not apply to section 37A.
About this article
This article is based on the consolidated text of the Act consulted (amendments shown up to Act 50 of 2019). Later amendments should be checked. Section 15 carries no amending footnote in the copy consulted. If you are considering a compounding application, our FEMA compounding team can help you prepare it and keep track of the timeline.
Sub-section (1): who, when and how
Section 15(1): "Any contravention under section 13 may, on an application made by the person committing such contravention, be compounded within one hundred and eighty days from the date of receipt of application by the Director of Enforcement or such other officers of the Directorate of Enforcement and officers of the Reserve Bank as may be authorised in this behalf by the Central Government in such manner as may be prescribed."
| Element | What the Act says |
|---|---|
| What can be compounded | Any contravention under section 13 |
| Who applies | The person committing the contravention |
| Who compounds | The Director of Enforcement, or such other officers of the Directorate of Enforcement and officers of the Reserve Bank as the Central Government authorises |
| Time | Within one hundred and eighty days from the date of receipt of the application |
| Manner | As may be prescribed (rules under section 46(2)(b)) |
"Any contravention under section 13"
The power attaches to contraventions under section 13, which covers the contravention of any provision of the Act, any rule, regulation, notification, direction or order, or any condition of an authorisation. Our guide on contravention and penalties under section 13 explains that section. The text of section 15 does not carve out any kind of contravention in sub-section (1); but section 37A(6) separately excludes section 37A, as explained below.
"On an application made by the person committing such contravention"
Compounding starts with the contravener. The Act does not give the officers a power to compound on their own motion in this sub-section. The form of the application, the fee, if any, and the supporting documents are not in the Act; they are matters for the rules. For the practical side of making an application, see our guides on how to apply for FEMA compounding and our compounding of contraventions overview. The facts in those guides are not the source of anything stated here.
"Within one hundred and eighty days"
The period is counted "from the date of receipt of application" by the officer concerned. The sentence structure is that the contravention "may ... be compounded within one hundred and eighty days from the date of receipt of application by the Director of Enforcement or such other officers ...". The Act does not say what happens if the period passes without an order, and it does not say whether time spent awaiting information from the applicant is excluded. The rules must be read for that.
Who compounds
The Director of Enforcement is named. In addition, "such other officers of the Directorate of Enforcement and officers of the Reserve Bank" as the Central Government authorises. The authorisation is a Central Government act. The Act does not name the Reserve Bank officers or say which category of contravention goes to which officer.
"In such manner as may be prescribed"
"Prescribed" is defined in section 2(x) as prescribed by rules made under the Act. The hook is section 46(2)(b): rules may provide for "the manner in which the contravention may be compounded under sub-section (1) of section 15". The Foreign Exchange (Compounding Proceedings) Rules, 2024, as amended from time to time, are made under section 46(2)(b) read with section 15(1) and supersede the rules of the same name made in 2000. This article names them only and does not describe what is in them. A reader who wants to know what the application must contain, what amount is payable or what orders are issued must read the rules as in force. Our article on section 46 lists all the rule-making hooks in the Act.
Sub-section (2): the effect of compounding
Section 15(2): "Where a contravention has been compounded under sub-section (1), no proceeding or further proceeding, as the case may be, shall be initiated or continued, as the case may be, against the person committing such contravention under that section, in respect of the contravention so compounded."
Points to note:
- Two situations are covered: a proceeding that has not begun ("initiated") and one that has begun ("continued").
- The bar is specific. It is against "the person committing such contravention", "under that section" (section 13), and "in respect of the contravention so compounded".
- It does not cover other contraventions. A contravention that was not compounded is not protected, even if it arose from the same facts.
- The Act does not say what compounding costs. There is no sum in the Act.
Example. Willow Imports Private Limited discovers that it did not follow a requirement of the rules on a particular transaction. It applies to the Reserve Bank for compounding. If the contravention is compounded within the period under the prescribed procedure, section 15(2) bars initiating or continuing any proceeding under section 13 against the company for that contravention. A different contravention, not included in the application, remains open to proceedings.
Where compounding does not apply: section 37A
Section 37A deals with assets held outside India in contravention of section 4, and sub-section (6) provides: "Nothing contained in section 15 shall apply to this section." So the compounding route in section 15 is not available for section 37A. Our article on section 37A explains the section. The text is silent on whether a contravention of section 4 that is dealt with under section 13(1A) can be compounded; take advice on that point and read the rules as in force.
Compounding and adjudication
Section 16 sets out adjudication, and section 15 is the alternative route for a contravention under section 13. Our post on compounding versus adjudication compares them in practical terms. The Act itself only says that a compounded contravention cannot be proceeded against under section 13.
What the Act does not say
- It does not give any compounding amount, fee or form.
- It does not say what the officers may consider in deciding the application.
- It does not give a right of appeal against a compounding order in section 15; the appeal sections (17 and 19) are covered in separate articles.
- It does not say what happens if the compounding terms are not complied with.
Need help with a compounding application?
Compounding is the Act's route to close a section 13 contravention without a full adjudication, but the manner is prescribed by rules and the 180-day period runs from receipt of the application. Our FEMA compounding team can help you assemble the facts, prepare the application and follow it through.
Key takeaways
- Any contravention under section 13 can be compounded on the application of the person committing it (section 15(1)).
- Compounding is to be done within one hundred and eighty days from receipt of the application, by the Director of Enforcement or officers authorised by the Central Government.
- The manner is prescribed by rules; the hook is section 46(2)(b), and the Foreign Exchange (Compounding Proceedings) Rules, 2024, as amended from time to time, are named for this purpose.
- A compounded contravention cannot be proceeded against under section 13 (section 15(2)).
- Section 37A(6) says section 15 does not apply to section 37A.
- The Act prints no compounding amount, fee or form.
Read next
- Section 13(1A) to (1D): penalty, confiscation and prosecution for assets held outside India
- FEMA Compounding Application: Draft Template
- Compounding vs Adjudication of Offences: Key Differences
- Section 14 and 14A: enforcement of penalty orders
Disclaimer: Based on a consolidated text of the Foreign Exchange Management Act, 1999 showing amendments up to Act 50 of 2019, as consulted on 2 October 2026. Limits, forms, timelines and procedures are set by rules, regulations and Reserve Bank directions made under the Act; they change from time to time and are not covered here. Later amendments should be checked. This article is general information, not legal advice; check the official text before acting.