An Indian abroad , popularly known as an NRI – has two important definitions determining his residential status – the primary one coined under the Foreign Exchange Management Act, 1999 – [FEMA] and the other coined under the Income Tax Act,1961.[ITAct].
The most relevant definition concerning an NRI’s various bank accounts and investments in movable and immovable properties in India is the one provided under FEMA, . which has replaced the Foreign Exchange Regulation Act , 1973- [FERA] with effect from 1st June,2000.
The second important definition is incorporated in the Income-tax Act of 1961 [ IT Act ] being wedded individual’s physical stay in India during a financial year begining 1st April and ending on the 31st March every year as also in preceding 4 , 7 and 9 years. IT Act lays down that any person including an Indian or overseas citizen of Indian origin residing outside India will be treated as Non-Resident [Indian] provided :“his stay in India does not exceed 181 days during a financial year commencing on 1st April and ending on 31st March”.
The stay need not be a continuous one as it is the total number of days during a financial year, which are taken into account while arriving at the residential status and it is important to note that the day of arrival and the day of departure are both included in number of days of stay in India.
Please click on NRI Definition to know in details.
To know about frequently asked questions by NRIs, please visit the official website of “Indian Investment Centre (A Government of India Organisation)”