As discussed in our previous article FEMA Residential status in India, it is evident that determination is based on the intention of an individual to stay in India or abroad. Also, onus lies on such an individual to determine residential status depending upon their intention. In light of regulatory requirement, lets understand determination of residential status based on below case studies:
- A, an Indian national, who is born and bought up in Mumbai, takes up employment with a Company in Australia and migrates to Sydney on December 1, 2019.
In the above case, even if Mr. A is in India for more than 182 days during FY 2019-20, he would be considered as a Non-Resident from the day of his joining employment in Australia.
- A, on December 15, 2019, shifts to Sydney to stay with her husband.
Even though Mrs. A had not been shifted owing to her employment, and also even if she stayed in India for more than 182 days during FY 2019-20, she will also be considered as a Non-Resident under FEMA law.
- A’s uncle, Mr. Y, who was settled in Australia since past 20 years, got retired from his job due to age. Mr. Y along with his wife Mrs. Y, decides to return to India and permanently settle in India.
As Mr. Y and Mrs. Y intends to permanently settle in India, both of them would be considered as resident individual upon arriving in India.
- Along with Mr. Y, his neighbour, Mr. P, a citizen of Australia, visits India for a small tour. Upon coming into India, he likes India so much that he decides to extend his stay as he wants to travel each parts of India to understand Indian culture.
In the above case, Mr. P, on arrival is still considered to be non-resident as he would have visited India on a tourist visa. But as he extends his stay in India, he can be considered as resident in India, if his stay in India exceeds 182 days unless he decides to go back to his home country.
- A’s elder Son, Mr. M, works in Big 4 firms. He gets an opportunity to travel to Australia and work from Sydney office for 9 months. He accepts the offer and visit his parents and stays there for period of 10 months. He spends 1 month with his parents on a leisure.
Since Mr. M is travelling to Australia for limited period of time, on a work visa, he will still be considered as resident even if his stay in India is for less than 182 days, as he intends to return to India.
- A’s younger son, Mr. N, after completing his graduation in India, gets admission in one of the finest colleges in New York for higher studies for a period of 3 years.
Based on the circular No. 45/2003 dated 8.12.2003 issued by RBI, Mr. N will become Non-Resident Indian (“NRI”) considering his stay abroad is more than 182 days during the preceding financial year.
As seen from the above, intention matters the most while determining residential status in India under FEMA law. Also, it is imperative that each individual have proof of proving their intention for stay in respective cases. Say for example, in case of Mr. M, since he left India on a work visa and extended his stay for a month to stay with his parents, Mr, M needs to get the proof of such an arrangement from his employer to keep as a proof. Further, Mr. P while on a tourist visa, decided to extend his stay. He might also decide to stay in India for more time. In such cases, where stay becomes indefinite, onus to prove temporary stay becomes difficult. Mr. P would be considered as resident of India, until he leaves India or say unless he leaves India within 182 days of his arrive into India.
Thus, each and every case depends on the facts and intention, where such intention could be backed by a proof, whenever required to be submitted.
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