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CS Professional · Strategic Management and Corporate Finance · Foreign Funding - Institutions

Mr. Raghav Menon, an Indian citizen, left India on 1 July to take up employment in Dubai for an indefinite period. For FEMA purposes, how is his status on departure best determined?

Raghav becomes a person resident outside India. Under FEMA, residence depends on purpose and intention, and going abroad for employment or for an uncertain period makes a person non-resident, regardless of citizenship or any 182-day count.

  1. AHe remains a person resident in India because he is an Indian citizen
  2. BHe becomes a person resident outside India because he has gone abroad for employment, which indicates an intention to stay outside India for an uncertain periodCorrect
  3. CHe becomes a person resident outside India only after completing 182 days abroad in the financial year
  4. DHe is a non-resident only if he surrenders his Indian passport

Explanation

FEMA defines residence by reference to purpose and intention, not citizenship or a day-count test. A person who goes out of India for employment, or for any purpose indicating an uncertain duration of stay abroad, is treated as resident outside India. The 182-day test belongs to the earlier FERA/income-tax approach, so it is wrong here.

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