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CS Executive · Setting Up of Business, Industrial and Labour Laws · Setting up of Business outside India and Issues Relating thereto

Kabir is found to have acquired foreign immovable property outside India, of aggregate value exceeding the threshold prescribed under the proviso to section 37A(1). Which consequence applies under section 13 of FEMA?

He faces a penalty up to three times the sum involved and confiscation of equivalent value situated in India, and in addition imprisonment up to five years and fine. Prosecution needs a written complaint by an officer not below Assistant Director.

  1. APenalty up to two lakh rupees only
  2. BPenalty up to three times the sum involved and confiscation of equivalent value in India, with imprisonment up to five years and fine also possibleCorrect
  3. COnly a warning, as section 6 permits holding foreign property
  4. DPenalty of five thousand rupees for each day only

Explanation

Section 13(1A) gives a penalty up to three times the sum involved and confiscation of equivalent value in India. Section 13(1C) adds imprisonment up to five years and fine, with cognizance only on written complaint by an officer not below Assistant Director under 13(1D). The two lakh rupees and daily penalty apply under 13(1) to other contraventions.

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