Mr. Arjun Verma, an Indian citizen, left India on 15-06-2025 to take up employment with a company in Germany. He had been residing in India prior to…

(i) Residential Status of Mr. Arjun Verma under the FEMA, 1999: Provisions: As per Section 2(v) of the FEMA, 1999, "person resident in India" means a person residing in India for more than 182 days during the course of the preceding financial year, but does not include a person who has gone out of India, or who stays outside India, for taking up employment outside India, or for carrying on business or vocation outside India, or for any other purpose indicating an intention to stay outside India for an uncertain period. The key feature of FEMA is that residential status is not determined solely by the number of days test. The purpose and intention of the stay abroad is equally relevant, and where a person leaves India for taking up employment abroad, his status changes to "person resident outside India" immediately from the date of his departure, irrespective of the 182-day criterion. Analysis: In the given case, Mr. Verma resided in India during FY 2024-2025 up to 14-06-2025 and left India on 15-06-2025 to take up employment in Germany. Conclusion: Since his departure was for the specific purpose of taking up employment outside India, he becomes a "person resident outside India" (i.e., a Non-Resident Indian) with effect from 15-06-2025 (the date of his departure) and not after completion of 182 days abroad. (ii) Remittances to Parents — Current Account Transaction: Provisions: As per Section 2(j) of the FEMA, 1999, a "current account transaction" means a transaction other than a capital account transaction, and includes, among others, payments due in connection with foreign trade, and remittances for living expenses of parents, spouse and children residing abroad, and expenses in connection with foreign travel, education and medical care of parents, spouse and children. Remittances made by a non-resident to his parents in India for their medical treatment and household/living expenses are payments of a current nature and are accordingly classified as current account transactions, not capital account transactions, since they do not alter the assets or liabilities (including contingent liabilities) of the remitter outside India or of the recipient in India. It is the defining test for a capital account transaction under Section 2(e) of the FEMA. Under Section 5 of the FEMA, read with the Foreign Exchange Management (Current Account Transactions) Rules, 2000, persons are free to draw or remit foreign exchange for current account transactions, except to the extent regulated by the said Current Account Transactions Rules. Remittances for maintenance of close relatives abroad (or, correspondingly, remittances by a non-resident for medical treatment and living expenses of parents in India) are not prohibited or restricted transactions under these Rules. Conclusion: Accordingly, the remittances made by Mr. Verma to his parents are permissible current account transactions.