Residency under the Foreign Exchange Regulation Act, 1999 (FEMA) is determined by a person’s intention of stay in India in addition to his period of stay in India.
According to FEMA, in the case of Individuals, a person is a resident of India if his/her period of residence in India exceeds 182 days during the preceding financial year (April – March) but does not include:
1. A person who has gone out of India or who stays outside India, in either case-
- for or on taking up employment outside India, or
- for carrying on outside India a business or vocation outside India, or
- for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;
2. A person who has come to or stays in India, in either case, otherwise than-
- for or on taking up employment in India, or
- for carrying on in India a business or vocation in India, or
- for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period
The definition indicates that where a person has come to India with a view to carry on a business, profession, vocation, employment or any other reason which indicates that he/ she intends to stay in India for an indefinite period, such person will also be considered as a resident even where their stay is less than 182 days in the preceding financial year. The corollary also holds good, wherein a person may have resided in India for more than 182 days in the preceding financial year, but if they have left India with a view to carry on a business, profession, vocation, employment outside India or any other reason which indicates that he/ she intends to stay outside India for an indefinite period, they shall not be considered as a resident of India.
Further, those who do not satisfy the 182 days criteria due to reasons like travel, medical reasons etc. shall continue to be residents of India for purpose of interpreting FEMA regulations.
To know about residential status under Income Tax Act, 1961,