Residential Status
  • Residential Status – Income Tax Act
  • Residential Status – FEMA

How to calculate the number of days of stay in India i.e. whether date of arrival in India and date of departure from India to foreign country shall be included or not for the purpose of Income-tax Act, 1961?

Ans. Yes, while calculating the number of days of stay in India, date of arrival and date of departure in India shall be treated as days of stay in India.

Who is treated as a Person of Indian Origin as per Income-tax Act,1961?

Ans. A person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India.

I am a person of Indian origin settled in abroad and engaged in the consultancy business. I stayed in India for 83 days during the F.Y. 2015-16 in respect of my consultancy business. Can I be regarded as a Non-resident in India for the F.Y.2015-16 as per Income-tax Act,1961?

Ans. As per the legislative history of Section 6, one can understand that the term ‘visit’ not only includes the period of leave or vocation but also includes the case where a person employed abroad or doing business in abroad, comes to India for a short duration in relation to his business. Accordingly in the above case, you are treated as a Non-resident in India.

What is the difference between residential status as per Income-tax Act, 1961 and Foreign Exchange Management Act, 1999?

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

What is the residential status of students going outside India for studies as per FEMA, 1999?

Ans. Students going abroad for studies are treated as Non- Resident Indians (NRIs) and are eligible for all the facilities available to NRIs under FEMA.

When a person leaves in India for the first time for the purpose of employment, what shall be his residential status as per FEMA, 1999?

Ans. He shall be a resident outside India from the date he leaves India for such purpose.

A person employed in an Indian company, goes outside India for export promotion of the Indian company for more than 182 days during the financial year. What shall be his residential status as per FEMA, 1999?

Ans. He shall be a person resident in India since he has not gone outside India for the purpose of employment / vocation / for an uncertain period. Further, the number of days spent in India is to be taken of the preceding FY (not the current FY).

A person comes to India for a certain period. He falls sick and happens to spend more than 182 days in the financial year. What shall be his residential status for in the next FY as per FEMA, 1999?

Ans. He shall be a person resident outside India for both the years as he came to India for a certain period.

A navy officer has been on sea during the preceding FY for more than 182 days. What shall be his residential status as per FEMA, 1999?

Ans. A ship bearing the Indian National flag is considered as the territory of that nation. Thus, he shall be a person resident in India.

A foreign national of non-Indian origin comes to India for the first time and sets up a business in India in the month of March. What shall be his residential status for the financial year as per FEMA, 1999?

Ans. The foreign national shall be a person resident outside India for the current financial year and the next financial year since he has not spent more than 182 days in India in the preceding FY.

A foreign citizen visits India to meet his family. He ends up spending more than 182 days in the financial year. What is his residential status as per FEMA in the next FY?

Ans. He shall be a person resident outside India since his intention was to stay in India for a certain period.

A nurse employed in an Indian concern accompanies her patient on a medical trip outside India. The medical trip lasts for one FY. What shall be the residential status of the nurse as per FEMA in the FY and the next FY?

Ans. In the FY she shall be a person resident in India (as she spent more than 182 days in the preceding FY) but she shall be a person resident outside India in the next FY (as she spent more than 182 days in the preceding FY).