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“If you learn only methods you will be tied to
Consisted of 91 sections.
FERA therefore proceeded on the presumption that all foreign exchange earned by
Indian residents rightfully belonged to the Government of India and had to be
collected and surrendered to the Reserve bank of India (RBI).
NEW TERMS INTerms like Capital Account Transaction,Terms like Capital Account Transaction, current
FEMA current Account Transaction, person,account Transaction person, service etc., have been
service etc. were not defined in FERA. defined in detail in FEMA.
DEFINITION OFDefinition of "Authorized Person" inThe definition of Authorized person has been
AUTHORIZED FERA was a narrow one ( 2(b) widened to include banks, money changes, off shore
PERSON banking Units etc. (2 ( c )
MEANING OFThere was a big difference in theThe provision of FEMA, are in consistent with income
"RESIDENT" ASdefinition of "Resident", under FERA,Tax Act, in respect to the definition of term "
COMPARED and Income Tax ActResident". Now the criteria of "In India for 182 days"
WITH INCOME to make a person resident has been brought under
TAX ACT. FEMA. Therefore a person who qualifies to be a non-
resident under the income Tax Act, 1961 will also be
considered a non-resident for the purposes of
application of FEMA, but vice-a-versa may not hold
true.
Comparison FERA & FEMA
PUNISHMENT Any offence under FERA, was a criminalHere, the offence is considered to
offence , punishable with imprisonmentbe a civil offence only punishable
as per code of criminal procedure, 1973 with some amount of money as a
penalty. Imprisonment is prescribed
only when one fails to pay the
penalty.
QUANTUM OFThe monetary penalty payable under FERA,Under FEMA the quantum of penalty has
PENALTY. was nearly the five times the amountbeen considerably decreased to three
involved. times the amount involved.
APPEAL An appeal against the order of "AdjudicatingThe appellate authority under FEMA is
office", before " Foreign Exchange Regulationthe special Director ( Appeals) Appeal
Appellate Board went before High Court against the order of Adjudicating
Authorities and special Director (appeals)
lies before "Appellate Tribunal for
Foreign Exchange." An appeal from an
order of Appellate Tribunal would lie to
the High Court. (sec 17,18,35)
RIGHT OFFERA did not contain any express provisionFEMA expressly recognizes the right of
ASSISTANCE on the right of on impleaded person to takeappellant to take assistance of legal
DURING LEGALlegal assistance practitioner or chartered accountant (32)
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