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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Any attempt to act against the provisions of FEMA attracts a monetary penalty, which may change to imprisonment if the accused fails to pay the financial penalty on time.
FEMA had become the need of the hour to support the pro- liberalisation policies of the Government of India. This activity directly referred into the capacities of multi national businesses working in India. FERA is a non-compoundable offense, which means that the complainant cannot enter into a compromise and drop the case against the accused. Additionally, FEMA is short with 49 sections, which are not detailed or restrictive.
Difference between FERA and FEMA
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It had a controversial 27 years stint during which many bosses of the Indian corporate world found themselves at the mercy of the Enforcement Directorate.
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. Tuesday 1 Jan Violation of FERA is a non-compoundable offence in the eyes of law.
Notify me of followup comments via e-mail. Under FERA, only “citizenship” was a criterion to conclude the residential status of a person. In the yearthe Tarapore Committee recommended changes in the present legislation that regulate foreign exchange in the country.
The main objective of the act is to facilitate foreign trade and to encourage systematic development and maintenance of forex market in the country. You must be logged in to post a comment. The Foreign Exchange Management Act is an extension of the earlier foreign exchange regulation act.
On the other hand, despite being an improvement of FERA, which means that it also covers payments and facilitation of foreign exchange activities, FEMA has a specific role of difrerence that external trade and payments are correctly executed.
It aims to promote foreign trade, foreign payments and to increase size of foreign exchange reserve in the country. FEMA expressly recognizes the right of appellant to take assistance of legal practitioner or chartered accountant The act applies to the whole country. It provides power to the Reserve Bank for specifying, inconsultation with the central government, the classes of capital account transactions and limits to which exchange aand admissible for such transactions.
Difference Between FERA and FEMA
Foreign Exchange Regulation Act was formulated and implemented when the country was experiencing challenges in its foreign exchange reserves. The Foreign Exchange Regulation Act is an act of parliament that was ane in with the aim of controlling and managing foreign payments, purchase of fixed assets to foreigners, and the export and import of currency from and in India.
On one flip side hand, FEMA represents Foreign Exchange Management Act that has been passed because of statement in Indian Parliament from the national government inside the yr of In FERA, contravention has been announced to be a crime in resistance to regulations and has been compoundable. In contrast betaeen of FEMA is a compoundable offence and the charges can be removed.
FEMA do not view outflow of foreign exchange as an evil act however it rather works to factor it out to manage the process of foreign exchange.
On the other hand, contravening the provisions of FERA results to jail term with no requirement of monetary charges. This act is a civil law and the contraventions of the Act provide for arrest only in exceptional cases. As per this law; a person who is living in India from last 6 months can be considered as an Indian. Therefore a person who qualifies to be a non-resident under the income Tax Act, will also be considered a non-resident for the purposes of application of FEMA, but a person who is considered to be non-resident under FEMA may not necessarily be a non-resident under the Income Tax Act, for instance a business man going abroad and staying therefore a period of days or more in a financial year will become a non-resident under FEMA.
FERA and FEMA | Foreign Exchange Management Act (FEMA) | Areas of Law | Law Library | AdvocateKhoj
Now, the restrictions on withdrawal of Foreign Exchange for the purpose of current Account Transactions, has been removed. The laws has develop to be crucial to its administration of overseas instead of its own regulation. Leave a Response Cancel Reply Name required.
This means that FERA was a countermeasure that came into force to liberate the country from foreign exchange challenges. You Might Also Like: In addition to this, FEMA aims to promote foreign payments, export of the country and promote foreign capital and investment betewen the country to promote holistic development of India. This information is updated till 08 October