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

Under section 13(1) of FEMA, a company contravenes an RBI direction, and the sum involved is not quantifiable. What is the maximum basic penalty on adjudication?

The basic penalty is up to two lakh rupees where the amount involved is not quantifiable. If the contravention continues, a further penalty up to five thousand rupees for every day after the first day may also be imposed.

  1. AUp to thrice the sum involved
  2. BUp to five thousand rupees
  3. CUp to two lakh rupeesCorrect
  4. DUp to five lakh rupees

Explanation

Section 13(1) provides a penalty up to thrice the sum involved where quantifiable, or up to two lakh rupees where the amount is not quantifiable. A further penalty up to five thousand rupees per day applies after the first day for continuing contraventions, so that is additional, not the basic penalty.

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