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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 to take up a three-year employment in Singapore. Under FEMA, her status as a person resident in India for the relevant year is best determined as follows:

Meera is a person resident outside India. FEMA treats a person who has left India for taking up employment outside India, or for any purpose showing an intention to stay abroad for an uncertain period, as non-resident. Citizenship and Indian bank accounts are irrelevant to this test.

  1. AShe remains resident because she is an Indian citizen
  2. BShe is a person resident outside India because she left India for employment outside IndiaCorrect
  3. CShe is resident since she stayed in India for more than 60 days in the preceding year
  4. DShe is resident if she has any bank account in India

Explanation

Under FEMA, a person who has gone out of India for employment, or for a purpose indicating an uncertain period abroad, is not a person resident in India. Citizenship and holding an Indian bank account do not decide residence. Option C wrongly imports the income-tax day-count test.

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