Section 37A 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 37A applies when foreign exchange, a foreign security or immovable property outside India is suspected to be held in contravention of section 4. An Authorised Officer may, after recording reasons in writing, seize value equivalent, situated within India. The seizure is then placed before a Competent Authority, who confirms or sets it aside within a stated period. An appeal lies to the Appellate Tribunal.
Section 37A(1) lets an Authorised Officer seize value equivalent, situated within India, of foreign assets suspected to be held against section 4, but not where the aggregate value outside India is less than the value as may be prescribed. The order goes to the Competent Authority within thirty days, who decides within one hundred and eighty days of the seizure. If the person discloses the assets and brings them back into India, the seizure may be set aside. Section 15 (compounding) does not apply to this section.
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. The footnote shows that section 37A was inserted by Act 20 of 2015, s. 142 (w.e.f. 9-9-2015); the definitions of "Authorised Officer" in section 2(cc) and "Competent Authority" in section 2(gg) were inserted by Act 20 of 2015, s. 138 (w.e.f. 9-9-2015). Section 37A is tied to section 4, which bars a person resident in India from holding foreign exchange, foreign security or immovable property situated outside India, "save as otherwise provided in this Act"; see our article on section 4 and our guide on overseas direct investment. If you hold assets abroad and are unsure of your position, our ODI reporting team can help you review it.
Who the two authorities are
| Authority | Definition in section 2 | Role in section 37A |
|---|---|---|
| Authorised Officer | Clause (cc): an officer of the Directorate of Enforcement authorised by the Central Government under section 37A | Seizes the equivalent value |
| Competent Authority | Clause (gg): the Authority appointed by the Central Government under sub-section (2) of section 37A | Confirms or sets aside the seizure |
Printing point: section 37A(1) says "the Authorised Officer prescribed by the Central Government", while section 2(cc) says he is "authorised" by the Central Government under section 37A. Both are quoted as printed.
Section 37A(1): the seizure
Upon receipt of any information or otherwise, if the Authorised Officer has reason to believe that any foreign exchange, foreign security or immovable property situated outside India is suspected to have been held in contravention of section 4, he may, after recording the reasons in writing, by an order, seize value equivalent, situated within India, of that foreign exchange, foreign security or immovable property.
Four features follow from the words.
- A belief and a suspicion. The officer needs reason to believe that the asset is suspected to have been held in contravention. The Act does not define the standard further.
- Written reasons. The order must record the reasons in writing.
- What is seized. Not the foreign asset, but value equivalent to it that is situated within India. The Act does not say what kinds of asset in India may be taken.
- The prescribed floor. The proviso says no seizure shall be made where the aggregate value of the foreign exchange, foreign security or immovable property situated outside India is less than the value as may be prescribed. The hook is section 46(2)(gg), which speaks of "the aggregate value of foreign exchange referred to in sub-section (1) of section 37A". The Act prints no amount, and this article gives none; it is in the rules made by the Central Government under section 46, as amended from time to time.
Section 37A(2): to the Competent Authority within thirty days
The order of seizure, along with relevant material, shall be placed before the Competent Authority, appointed by the Central Government, who shall be an officer not below the rank of Joint Secretary to the Government of India, by the Authorised Officer within a period of thirty days from the date of such seizure.
Section 37A(3): one hundred and eighty days, and the Explanation
The Competent Authority shall dispose of the petition within one hundred and eighty days from the date of seizure by either confirming or setting aside the order, after giving an opportunity of being heard to the representatives of the Directorate of Enforcement and the aggrieved person.
Printing point: the sub-section says "the petition", although no petition is mentioned earlier in the section; the sense is the seizure order placed before the Competent Authority under sub-section (2).
Explanation. In computing the one hundred and eighty days, the period of stay granted by court is excluded, and a further period of at least thirty days shall be granted from the date of communication of the vacation of the stay order.
Section 37A(4): what happens after confirmation
The order of the Competent Authority confirming the seizure continues till the disposal of adjudication proceedings; thereafter the Adjudicating Authority shall pass appropriate directions in the adjudication order about further action on the seizure made under sub-section (1). Adjudication is under section 16.
The proviso. If, at any stage of the proceedings under the Act, the aggrieved person discloses the fact of the foreign exchange, foreign security or immovable property and brings back the same into India, then the Competent Authority or the Adjudicating Authority, as the case may be, on receipt of an application from the aggrieved person and after hearing him and the representatives of the Directorate of Enforcement, shall pass an appropriate order as it deems fit, including setting aside of the seizure. The order is the authority's to make; the text says "as it deems fit", which is wider than a promise of release. Disclosure alone is not enough: both disclosure and bringing the asset back are needed.
Section 37A(5) and (6): appeal and no compounding
- Sub-section (5): any person aggrieved by any order passed by the Competent Authority may prefer an appeal to the Appellate Tribunal. The sub-section prints no period, form or fee. Section 19 speaks of orders of an Adjudicating Authority or the Special Director (Appeals); how its forty-five days and forms apply to an appeal against the Competent Authority is not stated in section 37A, and the reader should check the rules and the current law. See our article on section 19.
- Sub-section (6): nothing contained in section 15 shall apply to this section. The compounding power, explained in our article on section 15, therefore does not reach the seizure under section 37A.
The related penalty and prosecution provisions for such assets are in section 13(1A) to (1D), explained in our article listed under Read next.
Example. An Authorised Officer receives information that a hypothetical resident, Mr Rao, holds immovable property abroad in a way that section 4 does not allow. The aggregate value is above the prescribed value. After recording reasons in writing, the officer orders the seizure of equivalent value in India and places the order before the Competent Authority within thirty days. Mr Rao is heard, and the Competent Authority has one hundred and eighty days from the seizure, with a court stay excluded, to confirm or set aside. If Mr Rao later discloses the property and brings it back into India, he can apply, and the authority may pass an appropriate order, including setting aside the seizure. If the order goes against him, he may appeal to the Appellate Tribunal.
What the Act does not say
- It does not print the prescribed value; no amount is given here.
- It does not say what asset in India may be seized to make up the equivalent value.
- It does not give a time or form for the appeal in sub-section (5).
- It does not describe what the Adjudicating Authority's directions will contain.
Need help with foreign holdings and section 37A?
Where foreign assets are held, the questions are whether section 4 or an exception applies and what can be reported or regularised. Our ODI reporting team can help you map your overseas holdings against the Act and the rules before any step is taken.
Key takeaways
- Section 37A allows seizure of value equivalent in India, not of the foreign asset itself.
- An Authorised Officer needs reason to believe and written reasons; the aggregate value must not be below the prescribed value (section 46(2)(gg)).
- The order goes to the Competent Authority within thirty days; the decision is due within one hundred and eighty days, with court stay excluded.
- Disclosure and bringing the asset back into India allows an application for setting aside the seizure.
- An appeal lies to the Appellate Tribunal; section 15 does not apply.
Read next
- Section 4: holding foreign exchange, foreign security and property outside India
- Section 13(1A) to (1D): penalty, confiscation and prosecution for assets held outside India
- Section 37: investigation, search and seizure powers
- ODI: Round Tripping Restrictions
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.