Residential Status under FEMA

Resident: If an individual stays in India for more than 182 days during the preceding financial year, he will be treated as a person resident in India. There are a few exceptions as under:

• If a person goes/stays outside Indiafor (a) taking up employment, or (b) carrying on business or vocation, or 
  (c) for any other purpose for an uncertain period; he will be treated as a person resident outside India (non-resident). (It has been clarified that students going abroad for further studies will be regarded as non-residents.)
• If a person who is residing abroad comes to/stays in India only for (a) taking up employment, or (b) carrying on business or vocation, or (c) for any other purpose for an uncertain period; he will be treated as a person resident in India.

The term financial year means a twelve-month period beginning from April 1 and ending on March 31 next year.

Following persons (other than individuals) will be treated as persons resident in India:

• Person or body corporate which is registered or incorporated in India.
• An office, branch or agency in India, even if it is owned or controlled by a person resident outside India.
• An office, branch or agency outside India, if it is owned or controlled by a person resident in India.

The definition is however inadequate to define residential status of a firm, an HUF, a trust or any entity which does not have to be registered.

Conversely, a Non-Resident means a person who is not a resident in India.