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CA Intermediate · Corporate and Other Laws · The Foreign Exchange Management Act, 1999

Meera, an Indian citizen, left India on 1 June 2025 for employment in Dubai for an indefinite period. She has not returned to India since. Her friend says that she remains a 'person resident in India' for FEMA purposes because she is an Indian citizen. Under FEMA, 1999, which view is correct?

Meera is not a person resident in India. Under FEMA, residence turns on purpose and intention rather than citizenship, and a person who leaves India for employment abroad, showing intention to stay outside for an uncertain period, ceases to be resident. The 182-day test is not the criterion.

  1. AMeera remains resident because citizenship alone decides residence under FEMA
  2. BMeera is not a person resident in India, because she has gone out of India for employment outside India, indicating an intention to stay abroad for an uncertain periodCorrect
  3. CMeera remains resident until she has stayed abroad for 182 days in the same year
  4. DMeera becomes resident only if she opens a bank account in India

Explanation

FEMA residence depends on stay and intention, not citizenship. A person who has gone out of India for employment, or for any purpose indicating an intention to stay abroad for an uncertain period, is not a resident. The 182-day test applied in the older law no longer governs the definition, so that option fails.

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