Skip to content

CS Executive · Economic, Commercial and Intellectual Property Laws · Overseas Direct Investment

An adjudicating authority finds that a resident person acquired a foreign security situated outside India whose aggregate value exceeds the threshold prescribed under the proviso to Section 37A(1). Which statement correctly reflects the consequences under Section 13 as inserted in 2015?

For acquiring foreign assets above the prescribed threshold, the person faces a penalty up to three times the sum involved and confiscation of equivalent value in India, plus imprisonment up to five years and fine. Courts take cognizance only on written complaint by an officer not below Assistant Director.

  1. APenalty up to three times the sum involved and confiscation of equivalent value of assets in India, with possible imprisonment up to five years and fine, prosecution only on written complaint by an officer not below Assistant DirectorCorrect
  2. BPenalty only up to two lakh rupees, with no confiscation or imprisonment
  3. CPenalty up to ten thousand rupees on the person and cognizance by any court suo motu
  4. DImprisonment up to five years only, with no monetary penalty, on a complaint by any Enforcement officer

Explanation

Section 13(1A) provides a penalty up to three times the sum involved and confiscation of equivalent value situated in India. Section 13(1C) adds imprisonment up to five years and fine, in addition to the penalty. Section 13(1D) bars cognizance except on written complaint by an officer not below Assistant Director. The other options misstate the penalty, ignore confiscation, or wrongly allow suo motu cognizance.

Did you get it right without looking?

One question tells you little. A timed set on Overseas Direct Investment shows your real accuracy, how long you take and where you lose marks.

Practise Overseas Direct InvestmentFree diagnostic mock

More Overseas Direct Investment questions