FERA, 1973

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Objectives - To prevent outflow of Indian currency and to see that the foreign exchange legitimately due to India should be received. Provisions of FERA included-

1. Regulation of dealings in foreign exchange. (RBI the only authority to deal in foreign exchange) 2. Restrictions on payments 3. Restrictions regarding assets held by Non Residents and Import & Export of 4/15/12 certain currency and bullion.

5. Restrictions on appointment of agents or technical or management advisors in India. 6. Restrictions on place of doing business in India. 7. Restrictions on immovable property Amendments to Change FERA to FEMA
1.

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Restrictions regarding assets held by non residents

FEMA , 1998

Main objective of FEMA is to facilitate external trade and payments and to promote orderly development and maintenance of foreign exchange market in India. Main Features of FEMA

1. Dealings in foreign Exchange without permission from RBI, no person shall deal or transfer any 4/15/12 foreign exchange , receive or make

2. Holding of Foreign Exchange No person in India shall acquire, hold or possess or transfer any foreign exchange or immovable property without RBIs permission 3. Current Account Transactions Transfer of foreign exchange permitted in current account transactions. 4. Capital Account Transactions Permitted but RBI can put a cap on certain category if required 5. Export of Goods and services 4/15/12

6. Realisation & repatriation of foreign exchangeAny person who has to get payment from outside India, shall do so in specified time. 7. Authorised persons to be appointed by RBI 8. Penalty if any person contravenes any provision of this Act he is liable to pay penalty upto thrice of the sum involved and in failure to pay penalty within 90 days, he shall be liable to 4/15/12

Difference Between FERA & FEMA

Provisions in FERA 81 sections and in FEMA 49 sections. Punishment Under FERA criminal offence and under FEMA civil offence. Penalty 5 times of the amount involved in FERA and thrice in case of FEMA. Right of Legal Assistance Not provided for expressly in FERA.

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