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Foreign Exchange Management Act (FEMA)


3. Residential Status

The definition of "Residential Status" under FEMA has gone through considerable change. It has now been made compatible with the definition provided under "Income Tax" Act.

The residential status is now based on the physical stay of the person in the country. The period of 182 days as provided, indicates that it is not necessary that there should be a continuous period of stay. The period of stay would be calculated by adding up all the days of stay of the individual in the country.

An Indian resident becomes a non-resident when he goes abroad and takes up a job or engages in business.

A major change in the definition of residential status of partnerships and firms in worth noticing. Earlier, under FERA, a branch was considered a resident of a place where it was situated. Now, under FEMA, an office, branch or agency outside India owned or controlled by a person resident in India will be considered a resident in India for the purposes of this Act.

For example, a person residing in India has a branch in Mauritius; such branch will be considered a resident in India.



Foreign Exchange Management Act (FEMA) Back




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