A key difference between FERA and FEMA is that the former regulated the foreign trade while the later encouraged it. DIFFERENCES. CHANGES / PROGRESSION FROM FERA TO FEMA – A STEP AHEAD. Similarities. The similarities between FERA and FEMA are as follows. Difference between FERA and FEMA (Foreign Exchange Regulation Act and Foreign Exchange Management Act). Article shared by. FERA (Foreign Exchange.
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Presumption of extra territorial jurisdiction as envisaged in section 1 of FERA has been retained.
Main Features of the Foreign Exchange Management Act (FEMA)
If you do not wish to log-out, choose ‘Let me continue’. Under FEMA the quantum of penalty has been considerably decreased to three times the amount involved. If anyone found guilty ffema FERA violation; there was a provision of punishment directly.
Your email address will not be published. It came into force on June 1, This means that any person who is citizenship is subjected to all the provisions of the foreign exchange regulation act. Idfference an act initiated to facilitate external trade and payments and to promote orderly management of the forex market in the country.
Differences Between FERA and FEMA | Difference Between | FERA vs FEMA
It aims to promote foreign trade, foreign payments and to increase size of foreign exchange reserve in the country. The FERA was passed in at a time differnece there was acute shortage of foreign exchange in the country.
Provisions of Foreign Exchange Management Act. If you continue to use this site we will assume that you are happy with it. This act is a civil law and the contraventions of betwern Act provide for arrest only in exceptional cases.
FEMA came into act on 1st of June anx It specifically deals with possession and retention of foreign currency and includes all kinds of foreign securities and immovable property. However, FEMA is a compoundable violation where the accused can choose to agree with the accused and drop the charges.
Press Releases Blog Posts. It aimed at conserving foreign exchange and its optimum utilisation in the development of the economy. Check out this article to know more differences between the two acts. betwen
The primary purpose of FEMA is to regulate and facilitate foreign exchange while at the same time encouraging the development of forex market in the country. Under vema FEMA, provisions related to foreign exchange have been modified and liberalised so as to simplify foreign trade and payments. The objective of the Act is to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments for promoting the orderly development and maintenance of foreign exchange market in India.
FEMA is more human and natural in nature and removed all kinds of restrictions on withdrawal of foreign exchange. FERA was mainly formulated to deal with deep crunch betqeen foreign exchange post world war II and hence fea a rigid piece of legislation which have left all the businesspeople and Indian citizens at the mercy of Enforcement Directorate as violence of FERA was considered a criminal act and there were major penalties associated with it.
In addition to this, FEMA aims to promote foreign payments, export of the country and promote diffsrence capital and investment in the country to promote holistic development of India. FEMA had become the need of the hour to support the pro- liberalisation policies of the Government of India. The scope and power of search and seizure has been curtailed to a great extent. Foreign exchange position was satisfactory.
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Additionally, FEMA is short with 49 sections, which are not detailed or restrictive. You agree that we have no liability for any damages.
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On the other hand, contravening the provisions of FERA results to jail term with no requirement of monetary charges. It provides power to the Reserve Bank for specifying, inconsultation with the central government, the classes of capital account transactions and limits betaeen which exchange is admissible for such transactions.
Tuesday 1 Jan Comparison table for FERA vs.
Difference between FERA and FEMA
It applies to all branches, offices and agencies outside India owned or controlled by a person, who is a resident of India and also to any contravention there under committed outside India by two people whom this Act applies. Terms like Capital Account Transaction, current account Transaction person, service etc.
FERA was formulated with an assumption that foreign exchange is a scarce resource and hence must be protected and used with great care however FEMA was formulated with assumption that foreign exchange is an asset and must be properly managed.
The Scope and Objective of FEMA was mainly to amend the laws related to foreign exchangeto facilitate external trade and payments and to develop the foreign exchange market in India.