Ans. Income-tax Act,
1961determines residential status based on the number of days presence in India
during the relevant financial year.
Physical stay only is considered. Whereas, FEMA considers the intention of the
person to determine the residential status and the stay in the preceding financial year.
Further, as per the Income-tax Act,
1961 the purpose of stay in India /
abroad is not relevant. However, as per FEMA the purpose of stay is relevant.
There are three possible
residential status as per Income-tax Act, 1961: i.e. Resident and Ordinarily
Resident (ROR), Resident but not Ordinarily Resident (RNOR) and Non-Resident
(NR). Whereas as per FEMA there are two possible residential status: i.e.
person resident outside India and person resident in India