IS THE DEPENDENT SPOUSE OF AN NRI CONSIDERED AN NRI? CAN THEY OPEN AN NRO / NRE ACCOUNT?

The spouse who accompanies his/her NRI spouse with an intention to stay for an uncertain period gains the status of an NRI under FEMA, may continue to be a resident under the Income Tax Act.

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This is so because the conditions for determination of residential status in India as per the Income Tax Act is solely based on days of physical presence and not by intention.

One of the most common queries that arises regarding an NRI is about the residential status of the spouse who accompanies the spouse residing abroad to his / her place of employment.

There are many scenarios in this context, all of which are governed by the provisions of Foreign Exchange Management Act, 1999 (FEMA). Let's first understand how FEMA defines an NRI.

According to FEMA, NRI is an individual who is a 'person resident outside India' (PROI) and who is an Indian Citizen or is an OCI or PIO Card holder.

In general, a PROI means a person who stays in India for less than 182 days during the preceding financial year. However, stay of 182 days (less or more) shall not be applicable in the following situations:

Situation 1: For a person who has gone out of India or stays outside India for:

a) Taking up employment outside India or,

b) Carrying on a business or vocation outside India; or

c) Any other purpose, in such circumstances would indicate his/ her intention to stay outside India for an uncertain period.

Situation 2: For a person who has come to India or stay in India for other than the following instance:

a) Taking up employment in India, or

b) Carrying on a business or vocation in India, or

c) Any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period.

Assuming the NRI spouse is not into employment or business abroad, the relevant condition to be satisfied is “Any other purpose, in such circumstances as would indicate his/ her intention to stay in India for an uncertain period.” To simplify the above conditions, the spouse of an NRI can be termed to be an NRI if he / she satisfies any of the following conditions: