A Case study on The Foreign Exchange Management Act, 1999

Section 2(v) and Section 2 (w)

Situation # 1

You met Su at an Annual Cultural Event held in your Business School every January in
FY 2015-2016. She was visiting India for the first time.

Analyze and Solve with reasoning

Is Su a ‘Person Resident in India’ as per Section 2(v) of FEMA, 1999 for the FY
2015-2016? 2016-2017?

Solution # 1

The condition for FEMA act to be applicable is that the person should reside in
India for 182 days.

Since she is visiting for the 1st time in FY 2015-16, she is not a “Person Resident in
India”.

But for FY 2016-2017 the time span for her stay is not mentioned so we cannot
make a statement about “Person resident in India”.

1|Page
 Situation # 2

You and Su become good pals. In the same year in March 2015-2016, you both decide
to go on a road trip to discover various cities in India. Su stays in India for 3 months.

Analyze and Solve with reasoning-

. Is Su a ‘Person Resident in India’ as per Section 2(v) of FEMA, 1999 for the FY
2015-2016?

Solution # 2

She is visiting for the 1st time and stays for only 3 months (90 days) and
according to FEMA it should be at least 182 days, so the FEMA act is still not
applicable for FY 2015-2016 for PRI but she can be considered as PROI.

Situation # 3

Su goes back to her country but she loved the time spent in India and decides to work in
India. She comes back in FY 2016-2017 and works as Assistant Director for 183 days in
India for an Indian filmmaker’s company.

Analyze and Solve with reasoning-

. Is she a ‘Person Resident in India’ as per Section 2(v) of FEMA, 1999 for the FYs
2016-2017, 2017-2018?

Solution # 3

For FY 2016-2017

She stayed only 3 months (90 days) in 2015-2016 so FEMA is not applicable
because the minimum days should be 182.

For FY 2017-2018

She stayed for more than 182 days in the (FY 2016-2017) and she was there for
employment as an Assistant director. As both the conditions were satisfied for

2|Page
 FEMA, she can be Person Resident in India (PRI).

Situation # 4

Your Indian friend Ganesh gets an opportunity to go abroad for the first time to work in
Kenya. He works there for 265 days in FY 2016-2017.

Analyze and Solve with reasoning-

. Is he a ‘Person Resident in India’ as per Section 2(v) of FEMA, 1999 for the FYs
2016-2017, 2017-2018?

Solution # 4

For FY 2016-2017

He stayed for more than 182 days since he was a resident of India and has
employment in India, so he can be considered as PRI.

But during the current year he visited Kenya for the purpose of employment.

Ganesh doesn’t satisfy the second condition and therefore is considered a

PROI.

For FY 2017-2018

He worked for 265 days in Kenya in the previous year so he can be considered
as PROI according to FEMA but not PRI.

Situation #5

Your Indian friend Ganesh gets an opportunity to work for an Indian Company with a
3|Page
 branch in Kenya. He works there for 265 days in 2017-2018.

Analyze and Solve with reasoning-

. Is he a ‘Person Resident in India’ as per Section 2(v) of FEMA, 1999 for the FY
2018-2019?

Solution # 5

Ganesh stayed in Kenya for more than 265 days in 2017-18 and also employed
in an Indian company which has a branch in Kenya so he will consider as PROI
for the FY 2018-2019 but not PRI.

Situation # 6

Your neighbor Neha goes to USA for the first time for her Grandfather’s medical
treatment in 2015-2016. She has no knowledge of the time duration for her
Grandfather’s medical treatment.

Analyze and Solve with reasoning-

. Is she a ‘Person Resident in India’ as per Section 2(v) of FEMA, 1999 for the FY
2015-2016?

Solution # 6

As she is a citizen of India for 2014-2015, stayed in India for 182 days and has
an intention to stay in India. But she is uncertain about the duration of her stay
in the U.S.A. So, she will be PROI for FY 2015-2016.

4|Page
 Situation # 7

Your neighbor Neha’s Grandfather’s medical treatment in 2015-2016 takes more than
182 days. But she has no employment there. She is only taking care of her Grandfather.

Analyze and Solve with reasoning-

. Is she a ‘Person Resident in India’ as per Section 2(v) of FEMA, 1999 for the FY
2016-2017?

Solution # 7

For FY 2015-2016 she stayed in the US for more than 182 days so she will be
considered as PROI but not PRI as per FEMA act for the FY 2016-2017.

5|Page