IMPLICATION
ON DIFFERENT CATEGORIES PERSON RESIDENT IN INDIA Provision
of FEMA, are applicable with different implication on Person resident in, and
outside India. With respect to " Person Resident in India",
they are: - (1) A person who is resident in India, can acquire, hold, own
possess or transfer any foreign Exchange, foreign security or any immovable property
situated outside India, only according to FEMA FOREIGN SECURITY: means
any security, in the form of shares, stocks, bonds, debentures or any other instrument
denominated or expressed in foreign currency and includes securities expressed
in foreign currency, but where redemption or any form of return such as interest
or dividends is payable in Indian currency (2) The Reserve Bank of India
(R.B.I), may prohibit, restrict or regulate any of the following:
Transfer or issue of any foreign security by a person resident in India.
Any borrowing or lending in rupees in whatever form or by whatever name called
between a person resident in India and a person resident outside India.
Deposits between persons resident in India and person resident outside India:
R.B.I.
may make all these restrictions, in general or with respect to "Capital Account
Transactions."
"CAPITAL ACCOUNT TRANSACTIONS" means
a transaction, which alters the assets or liabilities, including contingent liabilities,
outside India of persons resident in India or assets or liabilities in India of
persons resident outside India. (iv) Giving of a guarantee or surety
in respect of any debt, obligation or other liability incurred, by a person resident
in India and owed to a person resident outside India. (v) Transfer
of immovable property outside India, other than a lease not, exceeding five years,
by a person resident outside India.
(3) A person resident in India
may hold, own transfer or invest in foreign currency, foreign security or any
immovable property situated outside India if such currency, security or property
was acquired, held or owned by such person when he was resident outside India
or inherited from a person who was resident outside India. (4) If any amount
of foreign exchange has become due or has accrued to any person resident in India,
then he shall take steps to realise and bring it back to India within the time
frame and manner specified by Reserve Bank PERSON RESIDENT OUTSIDE INDIA Implications
of FEMA, on "Person Resident outside India", are as follows: 1.
For making any sort of payment in any manner, to a "person resident outside
India", provisions of FEMA has to be complied, and also general or special
permission of Reserve Bank is required Similarly, for receiving any payment by
order or on behalf of any "person resident outside" in any manner, provisions
of FEMA has to be complied, and also general or special permission of Reserve
Bank is required. 2. The Reserve Bank may prohibit, restrict or regulate
any of the following Transfer or issue of any security by a person
resident outside India. Transfer or issue of any security or foreign
security by any branch, office or agency in India of a "person resident outside
India." Any borrowing or lending in rupees in whatever name
called between a "person resident in India" and a "person resident
outside India" Deposit between "persons resident in India"
and "persons resident outside India" Acquisition or transfer
of immovable property in India other than a lease, not exceeding five years, by
a person resident outside india. Giving of a guarantee or surety
in respect of any debt, obligation or other liability incurred, by a person resident
outside India.
The Reserve Bank of India may also regulate the
above noted activities, with respect to "Capital Account Transactions". 3.
A "person resident in india" may hold, own, transfer or invest in foreign
currency, foreign security, or any immovable property situated outside India if
such currency, security or property was acquired, held or owned by such person
when he was ' resident outside India" or inherited from a "person who
was resident outside India." 4. A "person resident outside India"
may hold, own, transfer or invest in Indian currency, security or any immovable
property situated in India if such currency, security or property was acquired,
held or owned by such person when he was "resident in India" or inherited
from a person who was resident in India 5. Reserve Bank may by regulation,
prohibit, restrict, or regulate establishment in India of a branch, office or
other place of business by a "person resident outside India", for carrying
on any activity relating to such branch, office or other place of business.
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