10 July 2010
Foreign Exchange Management Act, 1999 (FEMA) through various notifications regulates the transactions, whether it be a current account transaction [section 2(j) of FEMA] or a capital account transaction [section 2(e) of FEMA].
Notification No. 1 of FE MA prohibits investment in India, in any form, in any company or partnership firm or proprietary concern or any entity, whether incorporated or not, which is engaged or proposes to engage -
a) in the business of chit fund, or
b) as Nidhi Company, or
c) in agricultural or plantation activities or
d) in real estate business, or construction of farm houses or
e) in trading in Transferable Development Rights (TDRs).
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