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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Main Features of the Foreign Exchange Management Act (FEMA)
Get New Comparisons in your inbox: All About Income Tax Act. If you continue to use this site we will assume that you are happy with it. In the yearthe Tarapore Committee recommended changes in the present legislation that regulate betdeen exchange in the country. This statute was enacted in Your email address will not be published.
FEMA is more human and natural in nature and removed all kinds of restrictions on withdrawal of foreign exchange.
New Challenges before the Monetary Authority of India. For a person to be subjected to the provisions of foreign exchange management act, he or she must stay in India for more than six months. Best view in x User assumes all risk of use, damage, or injury.
Read this article to know more. FERA conferred wide powers on a police officer not below the rank of fems Deputy Superintendent of Police to make a search.
Article 3: Finance- FERA versus FEMA –
FEMA is much simple, and consist of only 49 sections. It introduced resident ship in place of citizenship. You must be logged in to post a comment. Terms like Capital Account Transaction, current account Transaction person, service etc.
Fine or imprisonment if the person does not deposit the prescribed penalty within 90 days from the date of conviction. 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. It provides power begween the Reserve Bank for specifying, inconsultation with the central government, the classes of capital account transactions and limits to which exchange is admissible for such transactions.
There is minimal uncertainty the execution of these legal pointers is equally essential for just about every society. Moreover, any agency that is managed by a resident of India is also subjected to requirements of FEMA. The Differeence Exchange Management Act is an extension of the earlier foreign exchange regulation act.
This act seeks to make offences related to foreign exchange civil offences. The main involving those 2 terminologies is the main aim as FERA has been manufactured in a bid to guard and forestall abuse of overseas alternative. It promotes more liberal form of economy. FEMA had become diffedence need of the hour to support the pro- liberalisation policies of the Government of India.
If anyone found guilty of FERA violation; there was a provision of punishment directly. In addition to this, FEMA aims to promote foreign payments, export of the country and promote foreign capital and investment in the country to promote holistic development of India. 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.
What are the differences between FERA and FEMA?
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. The monetary penalty payable under FERA, was nearly the five times the amount involved. As per this law; a person who is living in India from last 6 months can be considered as an Indian. It aims to manage foreign exchange more efficiently rather than conserving it.
In contrast violation of FEMA is a compoundable offence and the charges can be removed.
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Provisions of Foreign Exchange Management Act. FERA applied to the citizens of India and was enacted at a time when the foreign exchange of the country was experiencing challenges while FEMA applied to persons staying in India for more than six months. Any offence under FERA, was a criminal offencepunishable with imprisonment as per code of criminal procedure, After you affirm that the Indian legislation, you may possibly have to understand just two phrases have been found proper directly here that may be extremely complicated commonly known whilst both the FERA and FEMA.
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 The act is so elaborate and exhaustive such that it covers all citizens of India who are living inside or outside India. The main purpose of FERA was going to protect and deterrence of mishandling of overseas alternative. The definition of Authorized person has been widened to include banks, money changes, off shore banking Units etc.
It extends to the whole of India.
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.
Moreover, any offence under FERA was a criminal offence liable to imprisonment. The primary purpose of FEMA is to regulate and ferq foreign exchange while at the same time encouraging the development of forex market in the country.
Presumption of extra territorial jurisdiction as envisaged in section 1 of FERA has been retained. The act came into force, to regulate inflow and outflow of foreign currency, foreign payments, securities and purchase of fixed assets by the foreigners. Imprisonment is prescribed only when one fails to pay the penalty.