Share |

NRIs Under Income Tax Act And Persons Resident Outside India Under FEMA

[ FEMA and NRIs Preliminary Aspects Analysed ]

The expression Non-resident Indian or an NRI is used both under the Income Tax Act and FEMA. However, there is a great difference between the meaning of both the expressions. Sometimes, a person may be NRI under the I.T. Act but he may not NRI under the FEMA or vice versa. This is because NRI, i.e., an Indian Resident outside India under FEMA is treated differently now than he used to be under FERA. As regards the definition of the expression “Non-resident” under the I.T. Act. The expression used under FEMA is “person resident outside India”. Thus, Section 2(w) of FEMA defines a “person resident outside India” as a person who is not a resident in India. Hence, it becomes very important for us to know the meaning of the expression “a person resident in India”. As per Section 2(v) of FEMA a person resident in India means —

  1. a person residing in India for more than one hundred and eighty- two days during the course of the preceding financial year but does not include—

    (A)      a person who has gone out of India or who stays outside India, in either case—

(a) for or on taking up employment outside India, or

(b) for carrying on outside India a business or vocation outside India, or

(c) for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;

(B)        a person who has come to or stays in India, in either case, otherwise than —


(a) for or on taking up employment in India, or

(b) for carrying on in India a business or vocation in India, or

(c) for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;

(ii)         any person or body corporate registered or incorporated in India,

 

(iii)        an office, branch or agency in India owned or controlled by a person resident outside India,

 

(iv)        an office, branch or agency outside India owned or controlled by a person resident in India.

 

Thus, the residential status of a person under FEMA depends on his residential status in the preceding financial year. Thus, Section 2(v) (i) incorporates the text of a person having resided in India for more than 182 days during the preceding financial year. Hence, a person would be deemed to be a resident of India, if he goes abroad but without taking up the employment or without carrying on business or vocation outside India. Likewise, if a person who was resident in India, for more than 182 days in the preceding financial year goes abroad to stay with his relatives, he would continue to be a resident of India unless he obtains a “permanent resident visa or a citizenship of a foreign country”. For conclusive proof that a person is a resident outside India under FEMA, he should take up employment outside India or carry on outside India any person or profession or vocation. An Indian citizen who is a Nonresident as per the definition of Section 2(w), i.e. who does not come under the definition of “Person Resident in India” as per Section 2(v) of FEMA is an NRI and will also include a Non-resident person of Indian origin. Persons of Indian Origin (PlO) Card Scheme was launched on 31St March, 1999 for conferring advantage to an estimated 15 million PIOs. Persons of Indian Origin settled in countries other than Pakistan, and Bangladesh will be issued PlO cards that would exempt them from the requirement of a visa to visit India. This scheme treats them on par with other NRIs in respect of facilities under FEMA. A PIO Card is valid for a period of twenty years subject to validity of the passport of the applicant. The persons eligible for issuance of PIO Cards would include the persons who at any time held an Indian passport, or either of grand parents or great grand parents were born in and permanently resident in India or who is a spouse of a citizen of India or a PIO as mentioned earlier. Generally speaking, the expression NRI under the I.T. Act and Persons Outside India or NRI under the FEMA are used interchangeably but the distinction based on a number of days in the preceding year under the current year under the FEMA and the I.T. Act as explained earlier and above should be noted very carefully by every NRI.

 
FEMA and NRIs — Preliminary Aspects Analysed
1. Basic Introductions- FEMA and NRIs
2. FEMA and FERA
3. NRIs Under Income Tax Act And Persons Resident Outside India Under FEMA
4. FEMA Rules
5. RBI Regulations under FEMA

More... Topics !..

 

Tax Guide for NRI - Tax Planning, Tax Saving, Investment Guidance for Non-Resident Indians !

1. Basic Aspects Of Tax Planning For NRIs
2. How an NRI can Avoid Clubbing of his Incomes and Wealth with that of his Spouse and Children
3. The Incomes of an NRI completely Exempt from Income Tax
4. Capital Gain of an NRI could be Completely Exempt from Income Tax
5. Items completely Exempt from Wealth Tax for an NRI
6. Special Procedure of Assessment regarding Income of an NRI from Foreign Exchange Assets
7. Deductions Allowed to NRIs in the Computation of Total Income and Tax Payable
8. Procedure for the Filing of Income Tax and Wealth Tax Returns, Assessment, and Refunds
9. Gifts by NRIs to Relatives and Friends can be made fully Exempt from Gift Tax
10. FEMA and NRIs Preliminary Aspects Analysed
11. Acquisition and Transfer of Immovable Property in India by NRIs and FEMA
12. Permissible and Prohibited Current Account Transactions in Case of NRI
13. Investment In Shares, Securities, Units And Other Activities, etc. by an NRI in India
14. Deposits in India by an NRI
15. RFC account of a Returning NRI and Investment Abroad
   
Get Updated ...
 
Tax Tutorials
E-Payment Of Direct Taxes
Filing Of Return Of Income
Interest for Delay in Filing the Return of Income [Section 234 A]
Interest for default in Payment of Advance Tax [Section 234B]
Provisions Of 'Income-Tax Law' Useful For Non-Residents
MAT (Minimum Alternate Tax)
AMT ( Alternative Minimum Tax)
Tax On Long-Term Capital Gains (LTCG)
Tax On Short-Term Capital Gains (STCG)
Exemption[ Section-54] For Capital Gains Arising On Transfer Of Residential House Property
Tax Treatment Of Gifts Received By An Individual Or HUF
Set Off And Carry Forward Of Loss Under The Income-Tax Act
Interest For Delay In Payment of TDS/TCS And For Non-Payment Of Tax Demanded
Tax Deduction/Collection Account Number (TAN)
How to apply for PAN ?
Refund Of Excess Tax Paid By The Taxpayer (Sections - 237 to 245 )
Presumptive Taxation Scheme of Section 44AD
Presumptive Taxation Scheme of Section 44ADA
Presumptive Taxation Scheme of Section 44AE
Deduction in respect of Life Insurance Premium, PPF, NSC, etc. [Section 80C]
Deduction in respect of Medical Insurance Premium [Section 80D]
Tax Deducted at Source (TDS) from Interest, other than Interest on Securities (Section-194A)
Tax Deducted at Source (TDS) from Interest on Securities (Section 193)
Late Filing Fees And Penalty For Failure To Furnish/Delay In Furnishing The TDS/TCS Statements
LIBRARY @ Tax Management
TAX & INVESTMENT GUIDE FOR "NRI"- Non-Resident Indians !
GUIDE & FAQ @ TAX
GRAPHICAL PRESENTATION @ TAX
TIPS & TRICKS @ TAX
MANAGERIAL & FINANCIAL DECISIONS @ TAX
5 GOLDEN RULES OF TAX PLANNING
FAMILY TAX PLANNING
DEDUCTIONS FROM YOUR INCOME
EXEMPTED INCOMES
HUF - FORMATION, MANAGEMENT & TAX PLANNING
COMPUTATION OF GROSS TOAL INCOME
INCOME TAX @ GLANCE
MULTIPLE KNOWLEDGEBASE ON TAX
51 TIPS ON TAX PLANNING
APPEALS UNDER INCOME TAX
ASSESSMENTS
PENALTIES UNDER IT DEPATMENTS
TAX SAVING SCHEMES
TAX READY RECKONER
TAX RATES
PROSECUTIONS UNDER INCOME TAX DEPARTMENT
TAXATION SYSTEM IN INDIA
CHARITABLE & RELIGIOUS TRUST - TAXATION
PRESCRIBED FORMS WITH with Section / Rules
KNOWLEDGE BASE !
New Topics @ Tax KnowledgeBase...
 
 

Most Popular Topics :

Corporate Tax ( Taxation in Companies)
FAQ on TDS on Salaries
FAQ on Taxable Income
FAQ on Filing of Income Tax Return
Graphical Chat Presentation of Provision of Motor Car / Other Vehicles [Rule 3(2)(A)&(B)]
'Appeals' Under Income Tax Act. 1961.
'Assessments' Under Income Tax Act. 1961.
List of Exempted Incomes (Tax-Free) Under Section-10
Income Under the Head ' Business and Professions' [Section 28 to 44]
Income Under the Head ' Capital Gain'
Income Under the Head ' House Property '[Section- 22 - 25 ]
Income Under the Head "Salary"
[Section 15-17]
Income Tax on 'Partnership Firms'
PENALTIES Under Income Tax Act. 1961.
Tax Saving Schemes for Individual -Instant Guide
New Tax Rates For FY 2017-18 & AY 2018-19
"Exempted Incomes" under Income Tax Act.
Charitable & Religious Trust :Formation, Registration, & Taxation
Hindu Undivided Family [HUF] - Formation, Management and Taxation
 

Most Popular Links :

Clubing of Income Deduction U/s 80C
Allowances Us-17(3) Exemption-Salary
Tax Amendment-2015 Taxable Income
Clubing of Income Tax Deductions
HUF Deduction HUF Investment
Gift by HUF HUF Tax Planning Tips
Tax Saving Schemes Tax Planning Tips
Refund of Tax Fringe Benefit Tax-FBT
Return Filing Assessment / Scrutiny
Notice from I.T. Dept. Incomes Types @ TDS
Exemptions-Tax Returns “Summon” U/s 131
'Black Money' @ I.Tax Big Gifts To Be Taxed
'Appeals' under I.Tax Assessment @ I.Tax
Exempted Incomes Capital Gain
Business & Professions House Property
Salaries @ I.Tax Partnership Firm
'Penalty' under I.Tax Act. Tax Ready Reckoner
Charitable Trust Useful Links @ I.Tax
 
Guide & FAQ on Tax Knowledgebase @ Taxation Income Tax @ Glance HUF - Formation, Planning & Taxation
Charitable & Religious TRUST NRI (Tax Planning,Saving,Investemnt) Budget 2017-2018 GST (FAQ, Law, Act. Rules, Schedule, Enrollment)
FAQs - Income Tax India Tax Tutorials    

Disclaimer:
All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may click here to visit the web site of Income Tax Department for resolving their doubts or for clarifications