Can students be NRIs?

 Can a student on a fellowship open an NRI-related account? What about Indian executives posted abroad?

 The legal provisions related to such queries are so complicated that I have come across cases where Indian banks have refused to let such people open NRE accounts because they are not NRIs and have also not let them open ordinary resident accounts because they are abroad! This is an attempt to resolve the complications and find a right answer to these questions.

 The right to hold NRE/FCNR accounts in India is governed by FEMA which defines a person resident in India as a person residing in India for more than 182 days during the course of the preceding financial year (FY = April to March), but does not include a person who has gone out of India or who stays outside India, in either case:

 

 

For or on taking up employment outside India, or

For carrying on outside India a business or vocation outside India (sic), or

For any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period.

 A Person who is not a Resident in India is a Person Resident Outside India (ROI).

 Any student does not satisfy any of the three exceptions mentioned above and therefore, his residential status for FEMA has to be determined as follows:

 A student going abroad for the first time will always be a resident in India, whether his stay during that year was more than 182 days or not. The fact that he was in India for the preceding year for more than 182 days makes him a resident.

 During the subsequent FYs, he