Aurelia Menezes Quoted in Business Standard on Residency Determination for NRIs

Aurelia Menezes was recently quoted in a Business Standard article discussing the nuanced differences in determining residency status under Indian tax laws and the Foreign Exchange Management Act (FEMA).

In her remarks, Aurelia highlighted that while tax laws apply a rigid day-count test of 182 days to ascertain residency, FEMA adopts a more flexible, intention-based approach, factoring in both physical presence and the individual’s intent to reside abroad. She explained that the tribunal’s dual-condition test aligns with FEMA’s purpose-driven interpretation, which can override the tax law’s strict timeline.

Aurelia further noted that, as per Reserve Bank of India directives, Non-Resident External (NRE) and Non-Resident Ordinary (NRO) accounts must be reclassified to resident accounts only when resident status is acquired under FEMA—not merely upon satisfying tax residency thresholds. This interpretation impacts NRIs returning mid-year, especially those arriving post-September, in areas such as property purchases, investment eligibility, and bank account reclassification. Read more: https://www.linkedin.com/feed/update/urn:li:activity:7360600316767080448