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DEFINITION OF NON RESIDENT INDIAN |
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Non - Resident Indian under Foreign Exchange Management Act, 1999
The Foreign Exchange Management (Deposit) Regulations, 2000 and FEMA (Investment in Firm or Proprietary Concern in India) Regulation , 2000 define a Non Resident Indian as, a person should be :
1. Resident outside India AND
2. A citizen of India or a Person of Indian Origin.
Section 2(w) of FEMA, 1999 defines a 'person resident outside India' as a person who is not resident in India.
A 'person resident in India' is defined in section 2(v) as under:
| i) |
a person resident 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- |
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(a) |
for or on taking up employment outside India, or |
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(b) |
for carrying on outside India a business or vocation outside India, or |
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(c) |
for any other purpose, in such circumstances as would indicate his stay outside India for an uncertain period; |
| (B) |
a person who has come to or stays in India, in either case, otherwise than- |
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(a) |
for or on taking up employment in India, or |
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(b) |
for carrying on in India a business or vocation in India, or |
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(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. |
Persons of Indian Origin under FEMA, 1999 (PIO)
The term 'Person of Indian Origin' has been defined differently under different Regulations framed under FEMA, 1999.
FEM (Depopsit) Regulations, 2000, FEM (Borrowing and Lending in Rupees) Regulation, 2000, and FEM (Remittance of Assets) Regulations, 2000 define a 'Person of Inmdian Origin" (PIO) as under:
'A Person of Indian Origin' means a citizen of any country other than Bangladesh or Pakistan, if-
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(a) |
he at any time held Indian Passport |
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(b) |
he or either of his parents or any of his grand parents was citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 |
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(c) |
the person is a spouse of an Indian Citizen or a person referred to in sub-clause (a) or (b). |
FEM (Investment in Firm or Proprietary Concern in India) Regulations, 2000, exclude citizens of Sri Lanka also from the definition of PIO.
Non Resident under Income Tax Act, 1961
The definition of a non-resident for the purpose of Indian Income Tax Act is different than that under Foreign Exchange management Act, 1999. Residential status is determined on the basis of physical presence for every year separately as per the provisions of Income Tax Act, 1961.
A. Resident
| (a) |
An individual is resident if any of the following conditions are satisfied: |
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(i) |
he stayed in India for 182 days or more during the previous year |
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(ii) |
he stayed in India for 365 days or more during the four preceeding years and stays in India for atleast 60 days (182 days in case of an Indian Citizen or a person of Indian Origin coming on a visit to India or 182 days in case of an Indian citizen going abroad for an employment) during the previous year. |
| (b) |
Hindu Undivided Family (HUF) or firm or other Association of persons is resident of India except in cases where the control and the management of its affairs is wholly situated outside India in that previous year. |
| (c) |
A company is resident in India if- |
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(i) |
it is an Indian Company or |
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(ii) |
during the previous year, the control and management is situated wholly in India. |
B. Non Resident
A person is non-resident if he is not resident in India.
C. Resident but Not Ordinarily Resident
An individual or HUF is treated to be not ordinarily resident in India in any previous year if he or the manager of HUF-
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(a) |
has been resident in India in at least 2 out of 10 previous years immediately preceding the relevant previous year. |
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(b) |
has been in India for a period of 730 days or more during 7 years immediately preceding the relevant previous year. |
Overseas Corporate Bodies (OCBs) under FEMA, 1999
Overseas firms/companies etc. which are predominantly owned by NRIs are known as Overseas Corporate Bodies and accorded due importance akin to NRIs. As per FEM (Deposit) Regulations, 2000, an OCB is defined as 'a company, partnership firm, society and other corporate body owned directly or indirectly to the extent of atleast sixty percent by Non-Resident Indians and includes overseas trust in which not less than sixty percent beneficial interest is held by Non Resident Indians directly or indirectly but irrevocably.'
The definition under the 'Income Tax Act' is meant for the assessment of taxable income of a person, the definition under 'FEMA' is meant for the purpose of foreign exchange transactions and investments in India and abroad etc.
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